NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns a preliminary rating of A- (sf) to Tesla 2017-1, LLC, Series 2017-1, Class A Notes (“Tesla 2017-1”). The notes are newly issued asset-backed securities backed by a portfolio of residential and commercial photovoltaic solar installations (“PV Systems”).
The transaction is secured by distributions to the managing members of the related four financing funds from power purchase agreements (PPA) and lease agreements from 33,499 PV Systems. Approximately, 59.0% and 41.0% of the PV Systems are PPA and lease agreements, respectively.
At closing each financing fund will have the benefit of a tax loss insurance policy to cover tax loss payments to the tax equity investor equal to a minimum of 35% (inclusive of the deductible) of the investment tax credits by the financing fund and related fees and expenses.
The aggregate discounted solar asset balance (“ADSAB”) of the securitization pool, consisting of the discounted present values of the PPA and leases, is approximately $483.1 million. The securitization’s share of the ADSAB is $403.2 million. The transaction benefits from credit enhancement in the form of overcollateralization, excess cash flow, a liquidity reserve account and a supplemental reserve account. The supplemental reserve account shall be used to fund the costs associated with the replacement of the inverters of the PV Systems, the deductibles associated with the respective tax loss insurance policies and the purchase options of the related financing fund after the respective “flip dates”.
|Class||Rating||Initial Principal Balance|
|Class A Notes||A- (sf)||$265,000,000|
|Class B Notes||NR||$75,000,000|
Representations & Warranties Disclosure
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report, Tesla 2017-1 Representation and Warranties Disclosure.
Related Publications: (available at www.kbra.com)
- Tesla 2017-1, LLC Series 2017-1 Pre-Sale Report
- General Rating Methodology for Asset-Backed Securities
- General Rating Methodology for Asset-Backed SecuritiesRMBS: Residential Mortgage Default and Loss Model
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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).