NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns a preliminary ratings to two classes of notes from GoodGreen 2017-1 Trust (“GoodGreen 2017-1”). The notes are newly issued asset-backed securities backed by a portfolio of Property Assessed Clean Energy (“PACE”) assessments.
The Class A Notes and Class B Notes (together, the “Notes”) are secured by a portfolio of PACE assets in California (“California PACE Assets”), issued by the Golden State Finance Authority (“GSFA”), the Coachella Valley Association of Governments (“CVAG”), the County of Yolo (“County of Yolo”) and the City of Chula Vista (“City of Chula Vista” and together with GSFA, CVAG and County of Yolo, the “California Local Agencies”) and PACE assets in Florida (“Florida PACE Assets” and together with California PACE Assets, the “PACE Assets”), which are limited obligation bonds issued by the Green Corridor Property Assessment Clean Energy District (“Florida PACE District”).
The portfolio of PACE Assets consists of limited obligation improvement assessments. The PACE Asset portfolio comprises 7,686 PACE assessments with an aggregate principal balance of approximately $177.0 million levied against 6,776 residential and commercial properties in 41 California counties and 8 Florida counties. The average PACE assessment is approximately $23,013 with an average annual payment of approximately $2,609. The transaction benefits from credit enhancement in the form of excess spread, overcollateralization, an interest reserve, a liquidity reserve, and in the case of the Class A Notes, subordination.
KBRA analyzed GoodGreen 2017-1 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|
|Class A Notes||AA (sf)||$171,257,000|
|Class B Notes||A (sf)||$4,766,000|
About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).