Kroll Bond Rating Agency (KBRA) assigns ratings to two note classes issued by Sunnova Sol II Issuer, LLC, Series 2020-2. The transaction is secured by the equity interests of the managing members in the related Project Companies that in the aggregate, own a portfolio of 13,610 leases, power purchase agreements (PPA), and EZ Pay PPAs (each a Solar Service Agreement or SSA), and four hedged solar renewable energy certificate (SREC) contracts, associated with residential solar photovoltaic installations (PV Systems) and battery units (Energy Storage System). Cash flow related to the portfolio is net of operations and maintenance expenses, administrative and insurance expenses, and any distributions to a tax equity investor per the organizational documents for each respective Project Company.
The total aggregate discounted solar asset balance (ADSAB), consisting of the discounted payments of the leases, PPAs, EZ Pay PPAs and SREC contracts is approximately $294.0 million. The securitization share of the ADSAB is approximately $268.2 million. The portfolio consists of 11.8% PPA, 50.1% EZ Pay PPA, and 35.9% lease agreements by ADSAB and approximately 11.4% PPAs, 57.0% EZ Pay PPAs, and 31.6% lease agreements by number of PV Systems. As of September 30, 2020, the weighted average remaining term of the SSAs was 291 months and the weighted average FICO of the underlying customers of the PV Systems was 741.
- General Global Rating Methodology for Asset-Backed Securities
- Global Structured Finance Counterparty Methodology
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.
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.
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