Kroll Bond Rating Agency (KBRA) assigns a preliminary rating to two classes of notes from GoodGreen 2019-1 (GoodGreen 2019-1). The notes are newly issued asset-backed securities backed by a portfolio of Property Assessed Clean Energy (PACE) assessments.
The Class A and Class B Notes are secured by a portfolio of PACE assets in California (California PACE Assets), issued by the Golden State Finance Authority and the County of Yolo and PACE assets in Florida (Florida PACE Assets and together with the California PACE Assets, the PACE Assets), 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 7,376 PACE Assessments issued by the PACE Asset Issuers on 6,748 residential and commercial properties located in 39 California and 19 Florida counties. The aggregate principal balance of the Initial PACE Assets is approximately $172.7 million. The average PACE Assessment is approximately $23,410 with an average annual payment of approximately $2,447. 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 $52.3 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 U.S. Property Assessed Clean Energy (PACE) ABS Rating Methodology published on June 1, 2018. 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||AAA (sf)||$218,250,000|
|Class B Notes||A (sf)||$6,750,000|
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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 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.
Smart, Jr., Managing Director
Usman Khan, Associate Director