24 April 2024

US SOLAR FUND PLC

('USF', the 'Company')

FIXED-PRICE TENDER OFFER, INTERIM 2024 DIVIDEND POLICy AND REFINANCING PLANS

Further to the Company's 2023 Annual Report and previous announcements[1], the Company is pleased to confirm its intentions in respect of a return of capital via a fixed price tender offer, revisions to the dividend policy and  the outcome of its refinancing analysis.

FIXED-PRICE TENDER OFFER

USF intends to undertake a fixed-price tender offer, at a price of $0.764 per share (equivalent to the 31 December 2023 NAV of $0.78 per share, less 2% for the costs of administering the tender offer). Shareholders may choose to tender for sale some or all of their shares, subject to an upper limit of $19 million[2] being returned to shareholders.    

The terms of the proposed tender offer will be set out in a circular to be issued in the next week, which will be subject to a special resolution of shareholders at a General Meeting to be scheduled for 21 May 2024, which is the same date as the Company's Annual General Meeting.

INTERIM 2024 DIVIDEND POLICy  

In light of the proposed return of capital outlined above, and in order to improve operational cash dividend coverage during the remainder of the year, the Board has decided it is prudent to reduce the target dividend for 2024 to $0.0225/share ($0.0566/share in 2023). The Board will revise the dividend target for 2025 in light of any improvement in the coverage as a result of successfully completing a refinancing. 

REFINANCING PLANS

As set out in USF's Annual Report 2023, operational cash dividend coverage[3] stood at 0.50x for 2023. To improve operational cash dividend coverage and financial returns to shareholders by reducing near term debt amortisation, the Board has undertaken an exercise to explore likely terms for a refinancing of the senior debt facilities.

This exercise has now concluded, and the Board intends to carry out a potential refinance through the long-dated financing available in the US private debt markets. The Company's investment manager will progress this process which would require the Company to obtain an investment grade rating.

Based on the indicative terms received from potential lenders and brokers, the Board believes that  the US private debt market could provide an attractive source of debt capital which is well-matched to the long dated, fixed nominal contracted payments, paid by Investment Grade Counterparties, that comprise USF's revenues. 

If successful, expected outcomes of the refinancing may include additional capital becoming available to return to shareholders. This capital could include any refinancing proceeds not used to repay existing facilities, the release of the cash which currently supports a letter of credit and any proceeds from breaking the interest rate derivatives associated with the current debt facilities. A successful refinancing is likely to result in an increase in operational cash dividend coverage for 2025 and beyond. 

Subject to market conditions, the Board expects the overall process to be concluded in Q4 2024.

For further information, please contact:

About US Solar Fund plc

US Solar Fund plc, established in 2019, listed on the premium segment of the London Stock Exchange in April 2019. The Company's investment objective is to provide investors with attractive and sustainable dividends with an element of capital growth by owning and operating solar power assets in North America and other OECD countries in the Americas.

The solar power assets that the Company acquires or constructs are expected to have an asset life of at least 30 years and generate stable and uncorrelated cashflows by selling electricity to creditworthy offtakers under long-term power purchase agreements (or PPAs). The Company's portfolio currently consists of 41 operational solar projects with a total capacity of 443MWDC, all located in the United States.

Further information on the Company can be found on its website at http://www.ussolarfund.co.uk.

About Amber Infrastructure Group

Amber Infrastructure (Amber) is an international infrastructure specialist, focused on investment origination, development, asset management and in Europe, fund management. Amber's core business focuses on infrastructure assets across the public, transport, energy, digital and demographic infrastructure sectors that support the lives of people, homes and businesses internationally.

Among other funds, Amber Infrastructure advises International Public Partnerships, a FTSE 250-listed Company with a market cap of approximately £2.5 billion and 15-year track record of long-term investment in infrastructure assets globally. Amber is headquartered in London with offices in Europe, North America and Australia and employs c.180 infrastructure professionals. Amber has had a strategic partnership with the Hunt Group of Companies in the US since 2015. Learn more at www.amberinfrastructure.com.