Item 1.01. Entry into a Material Definitive Agreement.
On
The Issuer will allocate an amount equal to the net proceeds from the offering to finance or refinance, in whole or in part, existing or new eligible green projects as described in Sunnova's recently launched new green financing framework, and pending such use, will maintain or apply the net proceeds in accordance with the Issuer's normal liquidity practices.
The Notes are unsecured senior obligations of the Issuer, guaranteed by the
Guarantors, and will mature on
The following is a brief description of the terms of the Notes and the Indenture.
Ranking
The Notes will be the Issuer's senior unsecured obligations and will rank:
• senior in right of payment to any of Sunnova's and its consolidated subsidiaries' future indebtedness that is expressly subordinated in right of payment to the notes; • equal in right of payment to any of Sunnova's and its consolidated subsidiaries' existing and future unsecured indebtedness that is not so subordinated; • effectively junior in right of payment to any of Sunnova's and its consolidated subsidiaries' future secured indebtedness to the extent of the value of the assets securing such indebtedness; and • structurally junior to all existing and future indebtedness and other liabilities of Sunnova's non-guarantor subsidiaries.
Guarantees
The Notes will initially be guaranteed on a senior unsecured basis by
Optional Redemption
At any time prior to
On or after
Redemption Year Price 2023 102.938 % 2024 101.469 % 2025 and thereafter 100.000 %
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Change of Control Triggering Event; Asset Sales
If a specified change of control triggering event occurs, each holder of Notes will have the right to require the Issuer to repurchase that holder's Notes for a payment in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to, but excluding, the date of purchase. In connection with certain asset sales, the Issuer will be required to use the net cash proceeds of the asset sale to make an offer to purchase the Notes at 100% of the principal amount, together with any accrued and unpaid interest to, but excluding, the date of purchase.
Certain Covenants
The Indenture, among other things, limits Sunnova's ability and the ability of Sunnova's restricted subsidiaries, including the Issuer, to:
• incur or guarantee additional indebtedness; • create liens securing indebtedness; • pay dividends on or redeem or repurchase stock or subordinated debt; • make specified types of investments and acquisitions; • enter into or permit to exist contractual limits on the ability of their subsidiaries to pay dividends to them; • enter into transactions with affiliates; and • sell assets or merge with other companies.
The Indenture also requires Sunnova to maintain a cash asset coverage ratio (as defined therein) of not less than 2.0x as of the end of each quarter.
Certain of these covenants are subject to termination when and if the Notes are
rated investment grade by at least two of
The foregoing description of the Indenture is not complete and is qualified in its entirety by reference to the full text of the Indenture and the Form of 5.875% Senior Note due 2026, which are filed as Exhibits 4.1 and 4.2, respectively, to this Current Report on Form 8-K and are incorporated into this Item 1.01 herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit Description 4.1 Indenture, datedAugust 17, 2021 , amongSunnova Energy Corporation ,Sunnova Energy International Inc. ,Sunnova Intermediate Holdings, LLC andWilmington Trust, National Association . 4.2 Form of 5.875% Senior Note due 2026 (included in Exhibit 4.1). 104 Cover Page Interactive Data File (embedded within the inline XBRL Document).
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