Re Royalties Stock Price, News & Analysis

RE Royalties Ltd. (OTCQX: RROYF; TSXV: RE) is a renewable energy financing company that acquires revenue-based royalties over renewable energy facilities and technologies. The company provides non-dilutive financing solutions to privately held and publicly traded businesses in the renewable energy sector, allowing project owners to raise capital while retaining ownership of their assets.

According to company disclosures, RE Royalties applies a royalty-based business model to the renewable energy sector and states that it was the first to do so. The company focuses on creating recurring cash flows from a diversified base of royalties and loans linked to clean energy projects. Its stated business objectives are to provide shareholders with a strong growing yield, capital protection, a high rate of growth through reinvestment, and a sustainable investment focus.

Business model and royalty focus

RE Royalties structures investments as revenue-based royalties and secured loans tied to specific renewable energy projects and portfolios. In multiple announcements, the company describes transactions where it advances capital to developers or operators in exchange for:

• A gross revenue royalty over the life of a project or power purchase agreement (PPA)
• Interest-bearing secured loans with defined terms
• Occasional acquisition of project-owning entities where loans are settled through ownership

The company reports that it currently owns over 100 royalties on projects across several technologies, including solar, wind, hydro, battery storage, energy efficiency and renewable natural gas. These projects are located in regions such as Canada, the United States, Mexico, North America more broadly, South America, Europe, Asia and the Maldives, as described in its news releases. Through these royalties and loans, RE Royalties aims to build a portfolio of diversified, long-term cash-generating assets.

Project and technology exposure

Company announcements highlight exposure to a range of renewable energy technologies and applications:

• Solar power, including distributed generation and rooftop solar projects
• Wind energy, including operating wind projects under long-term PPAs
• Hydro power, including run-of-river hydro projects
• Battery energy storage systems (BESS) with long-term contracts
• Energy efficiency projects
• Renewable natural gas projects

In its communications, the company describes transactions supporting commercial and industrial distributed generation solar portfolios in the United States, solar and storage projects in Canada, rooftop solar projects in the Maldives, and battery storage projects in Ontario. It has also reported investments linked to hydro and wind assets in Canada and a proposed loan related to an operating wind project in the United States.

Examples of investment activity

RE Royalties regularly reports on specific investments that illustrate how its royalty-based model is applied:

• An agreement with Solaris Energy Inc. to invest up to a specified amount in two portfolios of distributed generation solar projects across several U.S. states, in exchange for a portfolio-level royalty on project revenues.
• Letters of intent and agreements to provide secured loans and royalties for solar, wind, energy storage and distributed generation projects in jurisdictions such as the United States, Canada and the Maldives.
• Loans and royalties supporting acquisition of operating hydro and wind projects under long-term PPAs in Canada.
• Financing for battery energy storage projects in Ontario, with royalties on gross revenues for the life of the assets.
• Support for rooftop solar projects in the Maldives through secured loans and gross revenue royalties over the term of associated PPAs.
• Settlement of outstanding loans with entities owning battery storage and solar projects, resulting in those entities becoming wholly owned subsidiaries and adding operating assets directly to the company’s portfolio.

These examples show that RE Royalties participates across the project lifecycle, from construction and development to operating assets, and that its returns are structured through a combination of interest income and long-term royalty streams.

Capital structure and green bond program

RE Royalties has also disclosed the use of green bonds as a funding mechanism. The company refers to a green bond program under which it has issued multiple series of green bonds and used the proceeds to finance or refinance renewable and sustainable energy projects. It notes that its Green Bond Framework received a Dark Green rating from S&P Global Ratings Shades of Green, which it describes as the highest possible level within that framework.

The company has reported the issuance of additional series of green bonds and the repayment of earlier series over time. Interest payments on green bonds and the use of proceeds are discussed in its public updates, alongside its objective of aligning this funding with climate-focused investments.

Dividends and shareholder focus

In several announcements, RE Royalties reports that its Board of Directors has declared regular cash distributions on common shares, designated as dividends for Canadian tax purposes. The company has highlighted a track record of consecutive quarterly dividends over multiple years and has also noted a change from quarterly to annual dividend declarations as part of its capital allocation approach.

Management commentary in these releases links dividend payments to the recurring nature of cash flows generated by royalties, loans and operating assets. The company also cites goals such as scaling recurring revenues, growing its asset base and maintaining a sustainable investment focus.

Geographic listings and investor access

RE Royalties’ common shares trade on the TSX Venture Exchange under the symbol "RE" and on the OTCQX market under the symbol "RROYF". The company has also announced that its shares commenced trading on the Frankfurt Stock Exchange under the symbol "Y2V". In its statements, RE Royalties notes that this cross-listing is intended to expand its reach to European and international investors and to increase trading liquidity.

Position within the renewable energy sector

Across its news releases, RE Royalties describes itself as a global leader in renewable energy royalty-based financing and emphasizes that it was the first to apply a revenue-based royalty model to the renewable energy sector. The company’s activities span solar, wind, hydro, battery storage, energy efficiency and renewable natural gas projects in multiple regions, with a focus on long-term contracts and recurring cash flows.

By providing non-dilutive capital to renewable energy developers and operators, RE Royalties aims to support the growth of clean energy projects while building a diversified portfolio of royalties and related investments. Its disclosures highlight ongoing due diligence on new opportunities, letters of intent for additional loans and royalties, and active management of its loan portfolio, including extensions, refinancings and settlements that can result in direct ownership of operating assets.

Frequently asked questions about RE Royalties Ltd.

The following questions and answers summarize key points drawn from the company’s public statements.