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KBRA Assigns Preliminary Ratings to Dividend Solar Loans 2018-2 LLC

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Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Dividend Solar Loans 2018-2, LLC (DIV 2018-2). This is a $103.45 million term ABS securitization collateralized by a pool of $110.004 million residential solar loans.

This transaction is Dividend Finance, Inc.s (Dividend or the Company) third securitization collateralized by UCC-secured residential consumer solar loans originated by DSF. 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 $110.004 million residential 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 33 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%. Depending on the loan type, these rates 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 transactions 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 transactions legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.

             
Class     Preliminary Rating     Principal Balance
A     AA (sf)     $24,200,000
B     A (sf)     $66,270,000
C     BBB (sf)     $6,270,000
D     BB (sf)     $6,710,000
       

To access the ratings, new issue report and disclosures, click here.

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

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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 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, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is 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.

Analytical:
Eric Neglia,
Managing Director
(646) 731-2456
[email protected]

Cecil Smart, Jr., Managing Director
(646) 731-2381
[email protected]

Jenny Ovalle, Director
(646) 731-2309
[email protected]

Usman Khan, Associate Director
(646) 731-2488
[email protected]

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