SolarCity’s Solar Bond Program is looking more and more like SpaceX’s private investment platform. After market close yesterday, SolarCity revealed in a SEC filling that it expects Elon Musk’s rocket company to buy $90 million of the $105 million in new Solar Bonds issued.
Last year, SpaceX already purchased solar bonds from SolarCity on two separate occasions: another $90 million followed by $75 million. SpaceX’s involvement in SolarCity’s Solar Bond Program is set to total around $255 million, which should help finance a lot of solar installations.
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In 2014, SolarCity bought Common Asset, a developer of online tools for investors. Through the newly acquired company, they developed a new website through which any US-based investor can buy 1 to 15 years bonds by increments of $1,000. The company uses the funds from the bonds to finance solar installations which in turn secure the bonds and offer 1.05% to 5.25% yields.
In the case of SpaceX latest purchase, the bonds have an interest rate of 4.4%.
SpaceX started buying solar bonds after it landed a $1 billion equity deal with Google and Fidelity in 2015.
According to SolarCity CEO Lyndon Rive, SpaceX goes through the same process to buy the bonds as any investor, meaning going through the website. But in SpaceX’s case, SolarCity needs to disclose the transaction with the SEC because of the relations between the 2 companies. Elon Musk is CEO and a major shareholder of SpaceX, he is also Chairman of the board and the largest shareholder of SolarCity. Lyndon Rive and Peter Rive are Musk’s cousins and respectively CEO and CTO of SolarCity. They are also both shareholders of SpaceX.
The companies also share several investors with Tesla Motors.