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SunEdison Stock Torched On Creditor-Negotiation Rumors

SunEdison ( SUNE ) stock was torched Tuesday on reports that it’s in talks with creditors over $725 million in second-lien loans, two weeks after the Vivint Solar ( VSLR ) acquisition went up in smoke. In afternoon trading on the stock market today , SunEdison stock crashed 19% and was trading below 2 on the firm’s second biggest single-day plunge this month. Meanwhile, Vivint Solar stock buoyed 3% early after securing $200 million in funding for rooftop project, but dropped sharply to just a fractional gain in the afternoon. SunEdison is engaged in debtor-in-possession negotiations , according to sources noted in a Debtwire report cited by Reuters. SunEdison and yield company TerraForm Power ( TERP ) have twice delayed filing their 10-K annual reports amid a SunEd liquidity investigation. SunEdison representatives declined to comment to IBD on “market rumors and speculation.” Current and former executives alleged in late 2015 that SunEdison misrepresented its liquidity stance. No material mistakes have been found in the audit thus far, SunEd said last week. But the audit is holding up both 10-K filings. Delaying its 10-K put TerraForm Power out of Nasdaq compliance . It formally has until May 16 to submit the form or file a plan to regain compliance, although the SunEd yieldco could get until Sept. 12 to become compliant or face delisting. And, at least four law firms are investigating whether TerraForm Power violated securities laws related to the  fraud and insider trading sections of the Securities and Exchange Act of 1934. TerraForm Power stock sank about 6% in afternoon trading Tuesday alongside its parent. Vivint Solar credited its $200 million term facility closure to its freedom “from the constraints of the terminated SunEdison merger agreement.” “We have demonstrated our ability to rapidly access the capital markets for flexible, term-debt financing to support our continued growth,” executive vice president Thomas Plagemann said in a statement. The $200 million will be available in two tranches — $75 million at 5.5% interest and $125 million at 8% interest. Credit Suisse analyst Patrick Jobin earlier called the loan’s terms “onerous.” But Vivint Solar says the financing is structured to allow it to utilize cash flow generated by the operating portfolio — under specific circumstances — to fund additional business initiatives. Image provided by Shutterstock .

Vivint Solar-SunEdison Debacle Buoys Rivals SolarCity, Sunrun

Vivint Solar ‘s ( VSLR )  SunEdison ( SUNE ) woes benefited competitors SolarCity ( SCTY ) and Sunrun ( RUN ) in January and February, as the pair swiped market share and drove pricing up 5%, a Credit Suisse analyst wrote Thursday. Intraday on the stock market today , Vivint Solar stock sank about 6%, heading toward a four-day losing streak. Shares are down 64% for the year, including a 20% single-day plunge on March 8 when it scrapped its sale to SunEdison . Wall Street gave 1.2% back to the solar name on March 9, when Vivint Solar announced its plan to sue SunEdison for “willful breach” of contract. SunEdison stock was down more than 1% Thursday afternoon, but SolarCity was up about 1.5%, and Sunrun trended up more than 3%. IBD’s 21-company Energy-Solar industry group was up more than 1%, and ranks 48 out of 197 groups tracked. Vivint Solar’s Q4 results reinforced uncertainty that began with SunEdison’s planned acquisition in July 20, Credit Suisse analyst Patrick Jobin wrote in a research report. Jobin retained his neutral rating on Vivint Solar stock but slashed his price target to 6 from 16.50. Shares hit a year-high July 21 and then plunged through December as SunEdison cut its bid on Vivint Solar, leading Vivint to question SunEd’s ability to pay. Analysts, meanwhile, said Vivint’s fundamentals had deteriorated on the shaky M&A ground. Headcount in Vivint’s operations and sales/marketing segments have declined 17% and 9%, respectively, since Q2 2015, “validating concerns of human capital loss during the drawn-out uncertainty of the company’s acquisition by SunEdison,” Jobin wrote. That uncertainty played out in Q4 when Vivint Solar reported 59 megawatts in installations, down 3% sequentially and below Jobin’s expectations for 60 MW. But bookings jumped 54% year over year, and 13% sequentially, to 80 MW. With only enough tax equity to fund 55 MW in current-quarter deployments, Vivint Solar needs to access more tax equity funding or seek aggregation facilities, Jobin wrote. As of Dec. 31, the company had fully drawn its working capital facility, but it still had $456 million in aggregation facilities and loans. But, Jobin noted, the most recent loan — a $200 million bridge financing loan — “appears to be at onerous terms.” The first $75 million will incur a 5.5% interest rate, according to Vivint Solar’s 10-K, filed March 14. The remaining $175 million will be at an 8% interest rate.

Attorneys Target SunEdison Yieldco TerraForm Power In Probes

Four law firms are investigating whether SunEdison ( SUNE ) yield company TerraForm Power ( TERP ) violated securities laws in conjunction with its annual report filing delays. Two say their probes concern the fraud and insider trading sections of the Securities and Exchange Act of 1934. TerraForm Power is facing a series of potential investor class action lawsuits and could be delisted from the Nasdaq if it doesn’t come into compliance. The SunEd yieldco has until May 16 to regain compliance or submit a plan to do so, though it could be granted an extension until  Sept. 12 . In midday trading Thursday, TerraForm Power stock was trading down more than 6%. SunEdison was down more than 3% on the  stock market today . Shares closed down 7.9% and flat, respectively, on Wednesday. Goldberg Law Firm said it is investigating whether TerraForm Power violated securities rules by issuing “misleading” information to investors and cites “claims of potential misrepresentations” by the company. Its investigation is focusing on Terraform’s Feb. 29 announcement that it would delay filing its form 10-K annual report with the SEC. Rosen Law Firm; the Pomerantz law firm; and Bronstein, Gewirtz & Grossman launched TerraForm Power investigations too. On Feb. 29, SunEdison said it needed more time to wrap an audit into its liquidity stance, stemming from allegations of financial misconduct by former executives. Early Wednesday, the firms again delayed their 10-Ks, but SunEd said it found no “material weaknesses” thus far. TerraForm Power blamed its parent company for the holdup, saying its accounting systems are tied to SunEd’s. On this news, TerraForm Power “fell sharply during intraday trading on March 16,” Rosen Law Firm said in a press release. “Rosen Law Firm is investigating a potential class action lawsuit to recover losses suffered by TerraForm Power investors,” the firm wrote.