8point3 Solar Venture Seeks $483 Million in Stock Offering

(Bloomberg) — 8point3 Energy Partners LP, the renewable

energy parnership formed by First Solar Inc. and SunPower Corp.,

is seeking to raise as much as $483 million in an initial public

offering.

8point3 plans to sell as many as 23 million shares for $19

to $21 each, according to a statement Wednesday. It will trade

on the Nasdaq under the symbol CAFD. The proceeds will be used

to pay the partnership’s owners and for general corporate

purposes, including future acquisitions.

First Solar and SunPower, the largest U.S. solar

manufacturers, are the first to jointly create such a so-called

yieldco. Under this model, companies that develop power plants

create a separate unit to own and operate the assets once

they’re producing electricity. The structure, which lowers

borrowing costs for the parent and provides a steady stream of

dividends for investors, is becoming increasingly popular in the

renewable-energy industry.

“This will be well received by the same kinds of investors

who looked at the yieldco IPOs from last year,” Pavel Molchanov, an analyst at Raymond James Financial Inc. in

Houston, said Wednesday in a telephone interview.

Yieldco initial offerings have “dominated” first-quarter

public financing for clean energy, attracting more than $1.5

billion of $2.2 billion in investment, said Jacqueline Lilinshtein, a New York-based analyst for Bloomberg New Energy

Finance. This year, seven yieldco IPOs added to a pool of about

12, she said.

‘Growth Ahead’

TerraForm Power Inc., which SunEdison Inc. took public last

year, this month began returning a quarterly dividend of 32.5

cents a share, almost twice as much as in 2014. NextEra Energy

Partners LP, another yieldco vehicle, offered 20.5 cents to

shareholders in May 2015, up from an initial 18.8 cents. 8point3

said it expects to pay a minimum of about 21 cents.

“This is a company that will have a lot of growth ahead of

it,” Molchanov said. “It’s starting out with a low yield, but

plenty of growth ahead of it.”

Goldman Sachs Group Inc. and Citigroup Inc. are leading the

offering, joined by Deutsche Bank AG, JPMorgan Chase & Co. and

Credit Agricole SA, according to a regulatory filing. The

underwriters have a 30-day option to purchase as many as 3

million shares, on top of 20 million being offered to the

public.

“Some of their competitors will be looking at this to

gauge investor sentiment for their own yieldcos — the likes of

Canadian Solar, Trina Solar will very much be keeping an eye on

this IPO and the amount of investor sentiment behind it,” James Evans, a London-based Bloomberg Intelligence analyst, said by

telephone.

First Solar, based in Tempe, Arizona, rose 2.3 percent to

$50.29 at the close in New York. SunPower rallied 5.2 percent to

$31.58, the biggest one-day gain for the San Jose, California-based company since Feb. 24.

To contact the reporter on this story:

Justin Doom in New York at

jdoom1@bloomberg.net

To contact the editors responsible for this story:

Reed Landberg at

landberg@bloomberg.net

Carlos Caminada, Tina Davis

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