SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 9, 2010
SunPower Corporation
(Exact name of registrant as specified in its charter)
001-34166
(Commission File Number)
| Delaware | 94-3008969 |
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
3939 North First Street, San Jose, California 95134
(Address of principal executive offices, with zip code)
(408) 240-5500
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement.
Entry into Letter of Credit Facility Agreement with Deutsche Bank
On April 12, 2010, SunPower Corporation (“SunPower” or the “Company”) and certain subsidiaries of the Company entered into a letter of credit facility agreement with Deutsche Bank AG New York Branch, as issuing bank and as administrative agent (in such capacity, “the Administrative Agent”), and the financial institutions parties thereto from time to time (such agreement, the “DB L/C Facility”).
The DB L/C Facility provides for the issuance, upon request by the Company or those of its subsidiaries party thereto from time to time as “Subsidiary Applicants”, of letters of credit by the “Issuing Banks” thereunder in order to support obligations of the Company, the Subsidiary Applicants, or non-party subsidiary account parties, in an aggregate amount not to exceed $350,000,000 (or up to $400,000,000 upon the agreement of the parties).
Each letter of credit issued under the DB L/C Facility (“Letters of Credit”) must have an expiration date no later than the earlier of the second anniversary of the issuance of that Letter of Credit and April 12, 2013, except that (a) a Letter of Credit may provide for automatic renewal in one-year periods, not to extend later than April 12, 2013 and (b) up to $100,000,000 in aggregate amount of Letters of Credit, if cash-collateralized, may have expiration dates no later than the fifth anniversary of the closing of the DB L/C Facility.
The obligations of the SunPower entities which are party to the DB L/C Facility are guaranteed by a pledge by the Company, SunPower North America, LLC, and SunPower Corporation, Systems (collectively, the “Guarantors”) of certain of the Guarantors’ accounts receivable and of the Guarantors’ inventory. The Guarantors are also required to maintain a collateral account with the Administrative Agent, with collateral equal to at least 50% of the dollar-denominated exposure under the Letters of Credit, and 55% of the non-dollar-denominated exposure under the Letters of Credit, maintained in such account.
The DB L/C Facility includes representations, covenants, and events of default customary for financing transactions of this type.
In connection with the entry into the DB L/C Facility, the Guarantors entered into a Security Agreement with the Administrative Agent, and SunPower entered into a Cash Collateral Account Security, Pledge and Assignment Agreement and Control Agreement with the Administrative Agent and an affiliate of the Administrative Agent, both of which agreements contain representations, covenants, and events of default customary for financing transactions of this type.
Amendment of Wells Fargo Credit Agreement
On April 12, 2010, SunPower and Wells Fargo Bank, N.A. (“Wells Fargo”) amended SunPower’s credit agreement (as amended from time to time prior to April 12, 2010, the “WF Credit Agreement”) with Wells Fargo (as amended as of April 12, 2010, the “Amended WF Credit Facility”).
The Amended WF Credit Agreement (a) removes the ability of SunPower to request additional letters of credit on and after the effective date of the Amended WF Credit Agreement, (b) allows collateralized letters of credit outstanding under the WF Credit Agreement as of the date of the Amended WF Credit Agreement to remain outstanding until October 12, 2010, and (c) removes certain of the covenants contained in the WF Credit Agreement which were applicable to the SunPower entities party to the Amended WF Credit Agreement, including but not limited to financial-compliance covenants. Certain of such covenants are removed effective as of the date of the Amended WF Credit Agreement, and certain of such covenants are removed, assuming no event of default under the Amended WF Credit
Agreement, as of April 27, 2010. Additional covenants, including but not limited to covenants relating to maintenance of existence and properties, repayment of obligations under the Amended WF Credit Agreement, and notifications to Wells Fargo, remain in effect, as do the events of default under the WF Credit Agreement (with the addition of a cross-default to defaults under the DB L/C Facility).
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information provided under the heading “Entry into Letter of Credit Facility Agreement with Deutsche Bank” in Item 1.01 above is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On April 15, 2010, SunPower issued a press release announcing the closing of the DB L/C Facility Agreement. The full text of the press release is being furnished as Exhibit 99.1 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information set forth herein and in the press release is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The information set forth in Item 7.01 of this report shall not be deemed an admission as to the materiality of any information in this report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.
Item 8.01 Other Events.
On April 9, 2010, SunPower prepaid approximately $30,000,000, a payment in full of all amounts due, under that certain loan agreement (the “Union Bank Loan Agreement”) dated April 17, 2009, by and between SunPower Corporation and Union Bank, N.A. and filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q on August 3, 2009, in accordance with the terms of the Union Bank Loan Agreement. The original scheduled maturity of the loan under the Union Bank Loan Agreement (the “Union Bank Loan”) was April 17, 2012; upon the prepayment of the Union Bank Loan, the Union Bank Loan Agreement, which contained representations, covenants, and events of default customary for financing transactions of this type, terminated. The Unio
n Bank Loan bore interest as set forth in the Union Bank Loan Agreement and related promissory note. Prepayment of the Union Bank Loan did not require SunPower to pay any premium or additional charge.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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99.1
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Press Release dated April 15, 2010.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SUNPOWER CORPORATION | |||
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Date: April 15, 2010
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By:
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/s/ DENNIS V. ARRIOLA | |
| Name: Dennis V. Arriola | |||
| Title: Senior Vice President and Chief Financial Officer | |||
EXHIBIT INDEX
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99.1
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Press Release dated April 15, 2010.
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FOR IMMEDIATE RELEASE
Contacts:
Investors
Bob Okunski
408-240-5447
Bob.Okunski@sunpowercorp.com
Media
Helen Kendrick
408-240-5585
Helen.Kendrick@sunpowercorp.com
SunPower Announces New Three-Year, $350 million Letter of Credit Facility
SAN JOSE, Calif., April 15, 2010 — SunPower Corporation (Nasdaq: SPWRA; SPWRB), a Silicon Valley-based provider of high efficiency solar cells, solar panels, and solar systems, today announced that it has signed a new three-year letter of credit facility. The new facility, which initially provides for a maximum issuance of $350 million in letters of credit but, at the agreement of the parties, may be increased to a maximum of $400 million, will replace the company’s existing $250 million letter of credit facility and will be underwritten by a syndicate of banks that include Deutsche Bank, Bank of America Merrill Lynch, Citi, Credit Suisse, and Barclays Capital.
“SunPower’s new letter of credit facility will further support our growing commercial, utility and power plant businesses in North America and Europe,” said Dennis Arriola, CFO of SunPower Corp. “This new facility gives us, initially, $100 million of additional letter of credit capacity, with the ability to add another $50 million, and improves our balance sheet flexibility by reducing our cash collateral requirement from 100 percent to 50 percent. We are also pleased that we have been able to arrange this facility with a syndicate of leading financial institutions and their support reflects confidence in our future growth as well as the bankability of our established technology.”
About SunPower
Founded in 1985, SunPower Corp. (Nasdaq: SPWRA, SPWRB) designs, manufactures and delivers the planet's most powerful solar technology broadly available today. Residential, business, government and utility customers rely on the company's experience and proven results to maximize return on investment. With headquarters in San Jose, Calif., SunPower has offices in North America, Europe, Australia and Asia. For more information, visit www.sunpowercorp.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not represent historical facts and may be based on underlying assumptions. The company uses words and phrases such as “will,” “growth,” “to add,” “improve,” and similar expressions to identify forward-looking statements in this press release, including forward-looking statements regarding: (a) the company’s future growth; (b) the final capacity to issue letters of credit under the facility; and (c) improving the company’s balance sheet flexibility. Such forward-looking statements are based on information available to the company as of the date of this release
and involve a number of risks and uncertainties, some beyond the company’s control, that could cause actual results to differ materially from those anticipated by these forward-looking statements, including risks and uncertainties such as: (i) general business and economic conditions, including seasonality of the industry; (ii) growth trends in the solar power industry; (iii) the continuation of governmental and related economic incentives promoting the use of solar power; (iv) the improved availability of third-party financing arrangements for the company’s customers; (v) construction difficulties or potential delays, including permitting and transmission access and upgrades; (vi) the company’s ability to ramp new production lines and realize expected manufacturing efficiencies; (vii) manufacturing difficulties that could arise; (viii) the success of the company’s ongoing research and development efforts to compete with other companies and competing technologies; and (ix) other
risks described in the company’s Annual Report on Form 10-K for the year ended January 3, 2010, and other filings with the Securities and Exchange Commission. These forward-looking statements should not be relied upon as representing the company's views as of any subsequent date, and the company is under no obligation to, and expressly disclaims any responsibility to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
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SunPower is a registered trademark of SunPower Corp. All other trademarks are the property of their respective owners.