This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

First Solar Won't Get One Big Energy Loan

Stocks in this article: FSLR SPWRA

Chew said First Solar explained that they simply weren't going to get one of the projects done on time because of other projects they are focused on, but the company says it is in final negotiations for selling Topaz to a buyer with such a low cost of capital it only should affect the project sale price by a small amount. "I have a hard time swallowing that," the analyst added, referring specifically to the sale price only being slightly lower without the federal loan guarantee.

No one has doubted that First Solar would be able to find debt financing for its projects -- the company said as much at a conference earlier this year when investors were concerned it might not get the DOE loans in the first place. However, any capital markets debt will be more expensive than the DOE loan, and suggests that First Solar cannot sell its projects to equity buyers at as high a price, reducing its earnings, and leading to a reduction in Wall Street estimates for its earnings power.

Rival SunPower (SPWRA) also has a $1.2 billion loan with the DOE in the conditional commitment phase. However, the sale of a 60% interest in the company to French oil giant Total provided the company with $1 billion in debt financing that would likely allow its projects to proceed without the DOE loan guarantee.

An Obama administration official told TheStreet on Wednesday that it didn't expect that all 14 loans in the conditional commitment phase would be closed by the Sept. 30 deadline. Congress has no formal oversight of the DOE loan guarantee program, something the program's critics on House Energy have recently lamented. The political risk could be limited for projects that are ready to move ahead and meet all of the DOE conditions, since any delay of the Sept. 30 deadline could require a change in legislation and it seems unlikely that the federal and legislative branch would agree on something like this in 9 days time.

Collins Stewart analyst Dan Ries wrote on Wednesday, before he was made aware of the project loan cancellation, "The three FSLR projects that have outstanding 1705 loan applications (with conditional approval) are essential to our CY12 and CY13 EPS forecast for FSLR. These projects being rejected would have a material negative impact on EPS forecast, though FSLR would likely be able to financing these projects without a loan guarantee at a higher cost of capital (less profitable). The risks to our forecast have increased as the 1705 DoE loan guarantee program has come under fire due to the Solyndra bankruptcy. We know of no means by which the company can mitigate this risk, as this risk centers on the DoE and its reporting to Congress."

-- Written by Eric Rosenbaum from New York

RELATED STORIES:



2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs