KBRA Assigns Preliminary Ratings to Tesla Sustainable Energy Trust 2024-1

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to three classes (five tranches) of notes totaling $500.00 million issued by Tesla Sustainable Energy Trust 2024-1 ("TSET 2024-1" or the "Issuer"), an ABS transaction secured by residental solar retail installment contracts ("RIC").

TSET 2024-1 represents the inaugural term ABS securitization collateralized by a pool of residential solar RICs originated by Tesla, Inc. ("Tesla") and sold to Tesla Finance LLC (“Tesla Finance” or the “Company”). The RICs will be used by obligors for the purchase and installation of solar panels, energy storage systems, and related equipment. Tesla Finance will act as the Sponsor, Servicer and Administrator for this transaction. The Company has previously sponsored one securitization comprised of auto loans and nine securitizations comprised of auto leases.

Tesla Finance is a wholly owned subsidiary of Tesla and is based in Palo Alto, California. Tesla Finance was formed in October 2013 as the captive finance company of Tesla and currently has operations in 46 states. The Company provides financing for Tesla customers to acquire Tesla vehicles, solar systems and/or energy storage systems.

KBRA applied its General Global Rating Methodology for Asset-Backed Securities as well as its Consumer Loan ABS Global Rating Methodology, Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology. In applying the methodologies, KBRA analyzed Tesla Finance's portfolio pool data, underlying collateral pool and proposed capital structure under stressed cash flow assumptions. KBRA considered its operational review of Tesla Finance. Operative agreements and legal opinions will be reviewed prior to closing.

To access ratings and relevant documents, click here.

Click here to view the report.

Methodologies

• ABS: General Global Rating Methodology for Asset Backed Securities
• ABS: Consumer Loan ABS Global Rating Methodology
• Structured Finance: Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

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 Information Disclosure Form(s) 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 Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. 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.

Doc ID: 1006582