Kroll Bond Rating Agency Assigns Preliminary Ratings to Golden Bear Funding Notes, Series 2016-1, Class A Notes

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns a preliminary rating of AA(sf) to Golden Bear Funding Notes, Series 2016-1, Class A Notes (Golden Bear 2016-1). The notes are newly issued asset-backed securities backed by a portfolio of Property Assessed Clean Energy (PACE) bonds.

The notes are secured by 347 limited obligation improvement bonds, issued by California Statewide Communities Development Authority (“CSCDA”) and the County of Los Angeles, California (LA County). The PACE bond portfolio is secured by 4,804 PACE assessments levied against 4,804 residential properties located in 36 California counties. The average PACE assessment is approximately $26,389 with an average annual payment of approximately $3,097. The transaction benefits from credit enhancement in the form of excess spread, overcollateralization, and a liquidity reserve.

KBRA analyzed Golden Bear 2016-1 using the General Rating Methodology for Asset-Backed Securities published on July 30, 2012. PACE assessments fall within Category 1: Financial Assets. The key determinants considered in the rating outcome are: a structural and legal analysis of the transaction; the treatment of PACE assessments as senior tax liens; and the creditworthiness of the Counties acting as servicer.

KBRA believes the transaction benefits from sufficient credit enhancement and a structure that accelerates principal payments to the rated notes upon weakening asset performance. In addition, KBRA views the eligibility requirements, especially the low LTV of the PACE assessment, as a positive credit consideration for this transaction.

                 
Class       Rating       Initial Principal Balance
A Notes       AA (sf)       $122,968,000

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Cecil Smart, Jr., (646) 731-2381
csmart@kbra.com
or
Anthony Nocera, (646) 731-2350
anocera@kbra.com
or
Andrew Lin, (646) 731-2483
alin@kbra.com
or
Usman Khan, (646) 731-2488
ukhan@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Cecil Smart, Jr., (646) 731-2381
csmart@kbra.com
or
Anthony Nocera, (646) 731-2350
anocera@kbra.com
or
Andrew Lin, (646) 731-2483
alin@kbra.com
or
Usman Khan, (646) 731-2488
ukhan@kbra.com