Debt and Credit Sources

12 Months Ended

Jan. 01, 2023

Debt Disclosure [Abstract]

Debt and Credit Sources

DEBT AND CREDIT SOURCES

The following table summarizes our outstanding debt on our consolidated balance sheets:

	January 1, 2023								January 2, 2022
	(As Restated)								(As Restated)
(In thousands)	Face Value		Short-term		Long-term		Total1		Face Value		Short-term		Long-term		Total1
Recourse Debt:
4.00% debentures due 20232,5	$	424,991	$	424,919	$	—	$	424,919	$	424,991	$	—	$	423,677	$	423,677
Asset-Backed Loan4	—		—		—		—		60,800		60,579		—		60,579
Safe Harbor Loan3	—		—		—		—		48,529		47,894		—		47,894
Other Debt	11,733		11,733		—		11,733		917		917		—		917
Total recourse debt	$	436,724	$	436,652	$	—	$	436,652	$	535,237	$	109,390	$	423,677	$	533,067
Non-Recourse Debt:
Credit Suisse Warehouse Loan	$	71,577	$	70,443	$	—	$	70,443	$	—	$	—	$	—	$	—
Other Debt	371		64		308		372		460		80		380		460
Total non-recourse debt	$	71,948	$	70,507	$	308	$	70,815	$	460	$	80	$	380	$	460
Total	$	508,672	$	507,159	$	308	$	507,467	$	535,697	$	109,470	$	424,057	$	533,527

1 Refers to the total carrying value of the outstanding debt arrangement.

2 See table below for discussion on the fair value of the convertible debt.

3 In June 2022, we repaid the remaining outstanding principal amount of our $47.6 million loan with Hannon Armstrong under the Safe Harbor facility.

4 In September 2022, we repaid the outstanding principal amount of our $61.7 million asset-backed loan with Bank of America, N.A. and terminated the facility.

5 On January 17, 2023, we repaid the remaining outstanding principal amount of $425.0 million of our 4.00% debentures due 2023.

As of January 1, 2023, the aggregate future contractual maturities of our outstanding debt, at face value, were as follows:

(In thousands) (as restated)	Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter		Total
Aggregate future maturities of outstanding debt	$	508,365	$	65	$	70	$	74	$	78	$	20	$	508,672

Convertible Debt

The following table summarizes our outstanding convertible debt:

	January 1, 2023						January 2, 2022
(In thousands)	Carrying Value		Face Value		Fair Value1		Carrying Value		Face Value		Fair Value1
Convertible debt:
4.00% debentures due 2023	$	424,919	$	424,991	$	431,720	$	423,677	$	424,991	$	501,489
	$	424,919	$	424,991	$	431,720	$	423,677	$	424,991	$	501,489

1 The fair value of the convertible debt was determined using Level 2 inputs based on quarterly market prices as reported by an independent pricing source.

Our outstanding convertible debentures are senior, unsecured obligations ranking equally with all of our existing and future senior unsecured indebtedness.

September 2011 Letter of Credit Facility with Deutsche Bank and Deutsche Bank Trust Company Americas (together, “Deutsche Bank Trust”)

In September 2011, we entered into a letter of credit facility with Deutsche Bank Trust which provides for the issuance, upon our request, of letters of credit to support our obligations in an aggregate amount not to exceed $200.0 million. Each letter of credit issued under the facility is fully cash-collateralized and we have entered into a security agreement with Deutsche Bank Trust, granting them a security interest in a cash collateral account established for this purpose.

In August 2022, we terminated our letter of credit facility with Deutsche Bank Trust and had no letters of credit issued and outstanding under the facility.

October 2021 Letter of Credit Facility with Bank of the West

In October 2021, we entered into a letter of credit facility with Bank of the West which provides for the issuance, upon our request, of letters of credit to support our obligations in an aggregate amount not to exceed $25.0 million. Each letter of credit issued under the facility is 50% cash secured and we have entered into a security agreement with Bank of the West, granting them a security interest in a cash collateral account established for this purpose.

As of January 1, 2023, letters of credit issued and outstanding under the Bank of the West facility totaled $23.8 million, which were collateralized with $12.5 million of restricted cash on the consolidated balance sheets.

Loan Facility with Credit Suisse AG

On June 30, 2022, we entered into a loan and security purchase agreement with Credit Suisse AG, New York Branch, and other financial institutions, to finance our retail installment contract receivables. The agreement provided for a $100.0 million delayed draw term loan which will mature on December 29, 2023. In connection with the loan agreement, we have established a special purpose entity acting as the borrower under the facility.

The loans under the agreement bear interest at a rate as adjusted by the benchmark adjustment, as defined in the term loan agreement, or the base rate plus the applicable margin for such loans. In addition, we also entered into an interest rate swap under the agreement, which converts the floating rate loan to a fixed rate. The swap terminates in March of 2024, unless we terminate early with the maturity of the loan, subject to any early termination costs. The term loan agreement contains customary representations and warranties as well as customary affirmative and negative covenants, including a covenant that any assets of the special purpose borrowing entity will not be available to other creditors of any of our other SunPower entities.

As of January 1, 2023, we had $71.6 million borrowings outstanding under the term loan facility, of which $8.2 million is being held in a Liquidity Reserve Account, in accordance with the loan and security purchase agreement, and is collateralized with restricted cash on the consolidated balance sheets. All borrowings outstanding under the term loan facility have a weighted average interest rate of between 5.4% to 6.4%.

Revolver and Term Loan Facility with Bank of America and Bank of the West

On September 12, 2022, we entered into a Credit Agreement with BofA Securities, Inc. and Bank of the West, as joint lead arrangers and joint bookrunners, and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swingline Lender, and an L/C Issuer. The Credit Agreement consists of a revolving credit facility (the “Revolver”) and a term loan facility (“Term Loan Facility” and, together with the Revolver, the “Facilities”), each facility providing for an aggregate principal amount of $100.0 million. The Credit Agreement was amended on January 26, 2023, and provided for, among other things, an increase of the Revolver commitments by $100.0 million (the “Increased Revolving Commitments”), including CitiBank, N.A. and JP Morgan Chase Bank, N.A. as the 2023 Incremental Revolving Lenders’. The Increased Revolving Commitments are governed by the same terms and conditions applicable to the Revolver commitments under the Credit Agreement prior to the effectiveness of the Amendment. The Revolver will mature on September 12, 2027, while the Term Loan Facility matures on (a) September 12, 2027, or (b) on September 12, 2024 if all or a portion of the outstanding 4.00% debentures due 2023 have converted into equity interests of the Company; provided that the portion of the Term Loan Facility that is applied to repay any of the 4.00% debentures due 2023 that do not convert will still mature on September 12, 2027 regardless of the conversion of other 4.00% debentures due 2023. As the remaining holders of our 4.00% debentures due 2023 did not elect to convert their bonds into our common stock prior to their maturity, the Term Loan Facility will mature on September 12, 2027.

The interest rate for borrowings under the Facilities is based on, at the Company's option, either (1) the highest of (a) the Federal Funds Rate plus 0.50% and (b) Bank of America's “prime rate” and (c) SOFR plus a margin, or (2) SOFR plus a margin. A commitment fee of between 0.25% and 0.35%, depending on our Total Net Leverage Ratio, is payable quarterly on the undrawn portion of the Revolver.

The Credit Agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants restricting the ability of the Company and certain of our subsidiaries, subject to negotiated exceptions, to: incur additional indebtedness; create liens or guarantee obligations; enter into sale-leaseback transactions; merge, liquidate or dispose of assets; make acquisitions or other investments; enter into hedging agreements; pay dividends and make other distributions and engage in transactions with affiliates. Under the Credit Agreement, the Company's Restricted Subsidiaries may not invest cash or property in, or loan to, our Unrestricted Subsidiaries amounts exceeding the limitations set forth in the Credit Agreement.

As of January 1, 2023, we had no borrowings under the Revolver and Term Loan Facilities, and there were issued but undrawn letters of credit outstanding under the Facilities of $0.1 million. The letters of credit have a maximum aggregate amount that can be issued of $50.0 million, which is included within the total principal amount of the Revolver facility.

On January 11, 2023 and January 31, 2023, we borrowed $100.0 million and $50.0 million on our Term Loan Facility and Revolver, respectively, pursuant to the Credit Agreement. The interest rate for the borrowings is SOFR plus a margin.