If the lease payments backing the bond stop, Solar City will attempt to rectify the situation, but it's not responsible for the remainder of the debt in any fashion. This specific aspect of operation is similar to other online servicers, like LendingClub, which would not compensate you in the event of a peer-to-peer loan default.

The prospectus https://solarbonds.solarcity.com/assets/bond_document/180/?f... lists the following risks (among others).

• your inability to initiate bankruptcy proceedings against SolarCity;

• the lack of certain “customary” investor protective covenants in the indenture;

• your inability to require us to repurchase the Solar Bonds upon a change of control of SolarCity;

• lack of cross-default provisions in the indenture with respect to our other debt; and

• the lack of an underwriter to conduct third party due diligence and other types of “gatekeeper” actions typically taken by an underwriter in an underwritten public offering.