NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns a preliminary rating to one class of notes from GoodGreen 2018-1 (“GoodGreen 2018-1”). The notes are newly issued asset-backed securities backed by a portfolio of Property Assessed Clean Energy (“PACE”) assessments.
The Class A Notes (the “Notes”) are secured by a portfolio of PACE assets in California, issued by the Golden State Finance Authority, the Coachella Valley Association of Governments, and the County of Yolo and PACE assets in Florida, which are limited obligation bonds issued by the Green Corridor Property Assessment Clean Energy District. The portfolio of PACE Assets consists of limited obligation improvement assessments. The portfolio of initial PACE Assets (“Initial PACE Assets”), to be acquired by the Issuer on the Closing Date, comprises 9,633 PACE Assessments with an aggregate principal balance of approximately $236.9 million levied against 8,615 residential and commercial properties in 42 California counties and 13 Florida counties. The average PACE Assessment is approximately $24,590 with an average annual payment of approximately $2,672. The PACE Assets purchased by the Depositor during the Prefunding Period (“Subsequent PACE Assets”) will, together with the Initial PACE Assets, constitute the PACE Asset Portfolio. The anticipated principal balance of the Subsequent PACE Assets is approximately $114.1 million. The transaction benefits from credit enhancement in the form of excess spread, overcollateralization, a liquidity reserve, and an interest reserve.
KBRA has analyzed this transaction using the Global General Rating Methodology for Asset-Backed Securities published on November 28, 2017. 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 special assessments having lien priority on par with senior tax liens; and the creditworthiness of the Counties acting as servicers.
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)||$340,470,000|
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.
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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.