KBRA Assigns Preliminary Ratings to Dividend Solar Loans 2018-1 LLC

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Dividend Solar Loans 2018-1, LLC (“DIV 2018-1”). This is a $104.66 million term ABS securitization collateralized by a pool of $110.17 million residential solar loans. The transaction that is expected to close on April 19, 2018.

This transaction is Dividend Finance, Inc.’s (“Dividend” or the “Company”) second securitization. The Notes are backed by a pool of mostly prime quality residential consumer solar loans and underlying Solar Energy Systems. Credit enhancement for the Notes consists of i) overcollateralization ii) subordination (in the case of Class A, Class B and Class C Notes) iii) excess spread and iv) amounts on deposit in the reserve account. The loan collateral in the transaction will include a pool of $110.17 million residential solar loans (approximately $92.4 million of “Initial Solar Loans” at closing plus $17.8 million of prefunded loans (“Subsequent Solar Loans”) from two different loan products that contain a combination of interest-only periods and required or optional prepayment thresholds.

Dividend is a California based specialty lender providing financing in the clean energy space through residential solar loans, home energy-related home improvement loans, as well as residential and commercial PACE assessments. Dividend was formed through the merger of Dividend Solar, Inc. and Figtree Finance Company in 2016. Dividend originates loans in 31 states and the District of Columbia through its state lending licenses where required. Loans typically have original balances of $10,000 - $50,000 (but may exceed this amount); original loan terms of 12 or 20 years and fixed interest rates of 2.50% - 9.99% (but may step-up if certain incentive payments are not made).

KBRA applied its Global General Rating Methodology for Asset-Backed Securities as part of its analysis of the transaction’s underlying collateral pool and the proposed capital structure. KBRA also conducted an operational assessment of Dividend in March 2018, as well as a review of the transaction’s legal structure and transaction documents. KBRA reviewed the operative agreements and legal opinions for the transaction prior to closing.

Class Preliminary Rating Principal Balance
A AA (sf) $25,340,000
B A (sf) $66,400,000
C BBB (sf) $6,600,000
D BB (sf) $6,324,000

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 available here.

Related Publications: (available at www.kbra.com)

CONNECT WITH KBRA
Twitter
LinkedIn
Download the iOS App
YouTube

About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Eric Neglia, Managing Director
(646) 731-2456
eneglia@kbra.com
or
Cecil Smart, Jr., Managing Director
(646) 731-2381
csmart@kbra.com
or
Jenny Ovalle, Director
(646) 731-2309
jovalle@kbra.com
or
Usman Khan, Associate Director
(646) 731-2488
ukhan@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Eric Neglia, Managing Director
(646) 731-2456
eneglia@kbra.com
or
Cecil Smart, Jr., Managing Director
(646) 731-2381
csmart@kbra.com
or
Jenny Ovalle, Director
(646) 731-2309
jovalle@kbra.com
or
Usman Khan, Associate Director
(646) 731-2488
ukhan@kbra.com