Monthly Market Digest - August 2025

Below is our first Monthly Market Digest, which provides a look at market trends and insights, along with some highlights from recent Reunion transactions. To recieve this monthly, or add any friends or colleagues, subscribe here.

What we’re seeing in the market:

• Some buyers have lower tax liability due to the OBBBA, impacting their ability to purchase credits: Several corporate clients are expecting to have lower tax liability in 2025 due to provisions in the OBBBA, including 100% bonus depreciation, domestic research & experimental expensing, and higher interest deductibility. We have particularly noted this trend with capital-intensive (e.g., oil and gas, datacenter) and research-heavy companies (e.g., pharmaceutical). While some anticipated this liability decrease early in the year, many taxpayers are only now coming to this determination. On the other hand, taxpayers who were holding off on making purchases due to legislative uncertainty are now actively seeking 2025 credits, given that the OBBBA has provided clarity on tax planning.
• Insurance costs have been on the rise. While sellers have been modeling insurance costs between 2 to 3% based on pricing in 2024, we have seen costs increase to a range of 3% to 4.5% or even more. Checks with insurance brokers suggest there is growing demand but limited capacity for insurance coverage, and requests for specific covered tax positions can add incremental premiums to a policy.
• Tax credit sellers have had success selling 2024 vintage credits in 2025: We have regularly seen new 2024 credit opportunities emerge in Q1 and Q2 of 2025. Given the relative scarcity of prior year credits, tax credits sellers have been able to quickly find buyers and sell credits near the top of the tax credit price range in Reunion's Market Monitor. Many of these buyers are fiscal year tax filers, who require credits that were placed in service in 2024 from calendar year sellers to offset taxes in their fiscal years that end in 2025.
• A majority of Reunion’s transactions are coming in under the capped reimbursement amount: Typically, sellers will negotiate a capped reimbursement for the buyer’s third-party legal and diligence costs, with the expectation that they will need to pay the full amount. In nearly a dozen of Reunion's recently closed transactions, the actual costs have come in less than the negotiated cap. This is largely due to Reunion’s due diligence and execution effort, where we provide a comprehensive diligence memo to both parties typically within 10 days of a term sheet being executed, to identify and tackle any issues upfront and avoid 11th-hour surprises.

Other initiatives: Forward commitment facility

We have partnered with a large, investment-grade taxpayer to enter into forward commitments for ITCs ($50+ million) that will be generated in 2026, 2027, and 2028. Our forward commitment facility will allow developers to maximize proceeds under their transfer bridge loans, as lenders will advance much higher amounts at lower costs when sponsors have executed a creditworthy tax credit agreement. The tax credit purchase commitment will ultimately be substituted with another purchaser upon closing, in a way that does not expose the lender to a less creditworthy balance sheet.

Highlights from Recently Closed Transactions

Project Sequoia | $35M in 2025 ITCs, Utility-Scale Solar

A tax equity investor approached Reunion for assistance in selling $35 million in §48 investment tax credits from a tax equity partnership. The seller provided a guaranty from the parent company of the class B member, along with tax credit insurance. Reunion introduced the seller to a large corporate buyer with whom we have completed multiple transactions.

What was interesting about this transaction:

• The transaction moved from term sheet to close in under 45 days, with funding occurring six months after close when the project is placed in service.
• Negotiations included the developer, the tax equity investor, the lender, and the tax credit purchaser. Despite the number of counterparties, Reunion was able to facilitate an efficient process, due largely to our rigorous due diligence and transaction support.

Project Olympic | $45M in 2025 AMPCs, Critical Minerals Production

A critical minerals producer worked with Reunion to execute a tax credit transfer agreement with a Fortune 500 taxpayer for $45 million of 2025 credits. Reunion was deeply involved in helping the buyer navigate contract negotiation, understand tax credit insurance, and gain internal approvals.

What was interesting about this transaction:

• This transaction represented the fourth transaction that Reunion has facilitated with this particular seller, across three large taxpayers for the 2023, 2024, and 2025 tax years.
• By negotiating quarterly payments in arrears, the seller can benefit from ongoing cash flows throughout the year, supporting their corporate expansion plans.

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