Eleven weeks after bankers and fund managers left Midtown Manhattan for coronavirus lockdown at home, the pace of activity in power and renewable energy finance in the US seems as hectic as ever. Indeed, disruption to the capital markets has created more work for some borrowers and unique opportunities for lenders.
Consider Vivint Solar, which quickly put together a Plan B after ditching what would have been a routine issuance in the ABS market. It turned out to be a rare chance for Brookfield Asset Management to earn 8% on a three-year holdco loan. And even though Vivint’s favored route was cut off, the company noted that it is still raising debt more cheaply, on the whole, than it was at the beginning of 2018.
Meanwhile, the wind and solar asset market is a target-rich environment, with auctions seemingly being launched on a weekly basis. Investment bankers say progress is slower than usual, but several deals have reached financial close during the pandemic, proving that it can be done.
Is there light at the end of the tunnel? It would be a good sign if the leveraged loan market were to return to normal. Hamilton Holdings will be an interesting test case. Price talk is understandably wider than before the lockdown, but still… 500 bp for a single-B credit? That’s hardly a credit crunch!