NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two classes of notes from Helios Issuer, LLC, Series 2017-1, a residential distributed generation solar securitization.
This transaction is Sunnova Energy Corporation’s (“Sunnova” or “the Company”) inaugural securitization. The transaction is backed by a diversified pool of 13,838 leases, power purchase agreements (PPA), and EZ Pay PPAs (each a “Solar Service Agreement” or SSA), and 20 hedged solar renewable energy certificate (SREC) contracts, associated with residential solar photovoltaic (P.V.) installations.
The SSAs have an aggregate discounted solar asset balance (ADSAB) of approximately $276.1 million while the SREC contracts have an ADSAB of approximately $23.5 million, for a total ADSAB of approximately $299.6 million. The P.V. systems are expected to be geographically distributed across 14 states and Puerto Rico and Guam, with California, New Jersey, and Puerto Rico constituting approximately 71.6% of the collateral by count and approximately 71.4% of the ADSAB of the SSAs. Approximately 99.9% of the solar service agreements have an original term of 25 years. The SSAs consist of approximately 25.6% PPAs, 44.5% EZ Pay PPAs, and 29.8% lease agreements by ADSAB and approximately 24.4% PPA, 47.5% EZ Pay PPA, and 28.1% lease agreements by number. As of February 28, 2017, the weighted average remaining term of the SSAs is 284 months and the weighted average FICO of the underlying customers of the P.V. systems is 737.
The transaction benefits from credit enhancement in the form of overcollateralization, excess spread, a liquidity reserve account, an inverter replacement reserve account and, in the case of the Class A Notes and Class B Notes, subordination. Proceeds deposited in the inverter replacement reserve account will be used to fund replacement of active inverters in the portfolio.
For complete details on the analysis, please see our Pre-Sale Report, Helios Issuer, LLC, Series 2017-1, which was published on April 3, 2017 at www.kbra.com.
Related Reports:
General Rating Methodology for Asset-Backed Securities, published July 30, 2012
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