OVERVIEW

Sunnova Energy International (NOVA) faces a shortfall and a weakening financing environment that are increasingly likely to push it into bankruptcy. Last quarter, we highlighted the risk that any deviation from NOVA’s cash generation guidance could precipitate a liquidity crisis and subsequent restructuring. This thesis is now materializing as its unrestricted cash has eroded to critical levels, its access to the capital markets is deteriorating, and the company has been forced to resort to rescue financing. We look to SunPower Corporation’s (SPWR) restructuring as a reference point in gauging potential outcomes for NOVA’s stakeholders. We note that the trading price of the ’26 OpCo notes suggests that market participants still expect a successful LME rather than an imminent bankruptcy filing.