Moody's rates Sunnova B3, notes B1

Moody's Investors Service said it assigned Sunnova Energy International Inc. a first-time B3 corporate family rating, B3-PD probability of default rating and SGL-3 speculative grade liquidity rating. Concurrently, Moody's gave a B1 senior unsecured rating to Sunnova Energy Corp.'s $350 million of senior unsecured notes maturing in 2026. Sunnova Energy International Inc., the parent company, and Sunnova Intermediate Holdings LLC, a wholly owned subsidiary of Sunnova Energy Corp., guarantee the notes. The issuer is an intermediate holding company.

"Sunnova operates in the residential solar industry and is still a young and evolving enterprise," said Toby Shea, a Moody’s vice president and senior credit officer, in a press release. "We see Sunnova growing at a fast pace, with its B3 corporate family rating reflecting a high level of spending to support this growth, weak cash flow coverage metrics and high debt leverage."

Sunnova sold $575 million of convertible notes earlier this year.

The outlook is stable. Sunnova's outlook reflects its ability to manage the demands of its growing residential solar portfolio and to continue developing projects that add to its long-term value and cash flow without hurting its credit profile, Moody’s said.

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