Fitch rates Sunnova B-, notes B

Fitch Ratings said it assigned Sunnova Energy International Inc. and Sunnova Energy Corp. B- issuer default ratings. The agency also gave B/RR3 ratings to Sunnova Energy Corp.’s $400 million of 5 7/8% senior secured notes due 2026. RR3 denotes good recovery prospects in default.

“The ratings reflect Sunnova's high leverage and low-interest coverage metrics on a consolidated basis and historically negative CFO. Fitch expects Sunnova's business profile and credit metrics to improve as the company reaches scale and growth capital moderates over the next three years. The residential solar companies, including Sunnova, should benefit from the Inflation Reduction Act of 2022 (IRA) and rising utility bills due to commodity pressures, in Fitch's view, though a sharp upward movement in interest rates can squeeze margins in the near term,” the agency said in a press release.

The outlook is stable.

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