KBRA Assigns Preliminary Ratings to Mosaic Solar Loan Trust 2020-1

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Mosaic Solar Loan Trust 2020-1 (“Mosaic 2020-1”), an asset-backed securitization collateralized by a pool of residential solar loans.

The impact of COVID-19 has resulted in rising unemployment, which can adversely impact the performance of the transaction and consumer loans in general. Owing to KBRA’s expectations of high and rising unemployment, KBRA increased its base case default assumptions for the subject pool in a manner that was consistent with a recent portfolio review of the residential solar loan sector noted in the following press release: KBRA Comments on U.S. Solar Loan ABS Monitoring. The review did not result in Watch Placements on any existing KBRA transaction ratings.

The collateral pool of Mosaic 2020-1 will include approximately $260.1 million of residential solar loans at closing. The preliminary ratings reflect the initial credit enhancement levels ranging from 64.09% for the Class A notes to 12.44% for the Class D notes.

Solar Mosaic, Inc. (“Mosaic or the “Company”) is a California-based specialty finance company focused on originating and servicing consumer loans used for the purchase of residential solar systems. Mosaic was founded in 2011 and began originating residential solar system loans in June 2014. Mosaic originates loans to mostly prime credit quality homeowners through its partnerships with more than 250 active approved solar system installers/dealers. The Company directly originates loans in 47 states and the District of Columbia through its state lending licenses where required, and across all 50 states and the District of Columbia through lending partnerships with financial institutions.

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

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the U.S. Information Disclosure Form located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA.

Contacts

Analytical Contacts
Melvin Zhou, Senior Director (Lead Analyst)
+1 (646) 731-2412
mzhou@kbra.com

Pritam Patel, Associate
+1 (646) 731-3374
ppatel@kbra.com

Abby Barkwell, Director
+1 (646) 731-3304
abarkwell@kbra.com

Rosemary Kelley, Senior Managing Director (Rating Committee Chair)
+1 (646) 731-2337
rkelley@kbra.com

Business Development Contact
Ted Burbage, Managing Director
+1 (646) 731-3325
tburbage@kbra.com

Contacts

Analytical Contacts
Melvin Zhou, Senior Director (Lead Analyst)
+1 (646) 731-2412
mzhou@kbra.com

Pritam Patel, Associate
+1 (646) 731-3374
ppatel@kbra.com

Abby Barkwell, Director
+1 (646) 731-3304
abarkwell@kbra.com

Rosemary Kelley, Senior Managing Director (Rating Committee Chair)
+1 (646) 731-2337
rkelley@kbra.com

Business Development Contact
Ted Burbage, Managing Director
+1 (646) 731-3325
tburbage@kbra.com