Market Updates

T-REX Market Update 4/15/2016

By April 22, 2016 No Comments

Market Update and Commentary: 4.15.16

SunEdison and SolarCity remain in the news this week. SolarCity continues to raise substantial capital from major investment banks, closing both a tax equity fund and a round of non-recourse financing with BAML and Credit Suisse, two of the most active banks in the solar space. SunEdison sees its stock price jump substantially on news (from its own audit committee) that the company committed no fraud, although cash management issues remain and the threat of bankruptcy still appears imminent. Meanwhile, on the topic of bankruptcy, one of the titans of the U.S. coal industry files for Chapter 11.

  • GTM: SolarCity continues to raise financing.
    • SolarCity closed two major rounds of funding to fuel both its residential and commercial businesses.
    • On April 7th, SolarCity announced it had closed a tax equity investment worth $188M with BAML and another investor.
    • On April 6th, the company announced it had closed a $150 million round of non-recourse financing with Credit Suisse to support deployment of commercial solar energy systems, including battery storage systems.
  • GTM: SunEdison shares jump Thursday on findings from internal investigation.
    • SunEdison’s audit committee conducted an investigation on the company, and found that while the developer “lacked certain accounting controls,” there was no evidence of fraud.
    • SunEdison’s stock price jumped more than 60% on the news.
    • The independent counsel “identified issues with the Company’s overly optimistic culture and its tone at the top,” and the independent directors “identified issues with cash forecasting and liquidity management practices.”
    • SunEdison has still not filed its 2015 and Q4 financial reports.
  • The Washington Post: Largest U.S. coal company files for bankruptcy
    • Coal Peabody, the largest and most storied (the company dates to the 1880s) U.S. coal company, announced Wednesday its filing for Chapter 11 bankruptcy.
    • The company cited an “unprecedented industry downturn,” which it attributed to a range of factors including an economic slowdown in China, low coal prices and “overproduction of domestic shale gas.”
    • Debt from the company’s $5.2B acquisition of Macarthur Coal also placed unmanageable pressure on the company at the same time as cash flows diminished.

Written by T-REX Associate Robert Bray

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