Mosaic and Goldman Sachs priced a co-sponsored solar loan securitization on Monday, a $317.52 million deal dubbed Mosaic Solar Loan Trust 2018-2-GS.
The $273.84 million senior class ‘A’ notes, rated A- by Kroll Bond Rating Agency, were priced at 135 basis points over swaps, slightly wide of where the senior notes of Mosaic’s last ABS transaction were priced. The class 'A' bonds in that deal were priced at 130bp over swaps in April (PFR, 4/12).
The $17.03 million ‘B’ tranche of the most recent offering was meanwhile priced at 190 bp over swaps, while the $15.04 million ‘C’ tranche was priced at 315 bp, yielding 6.048%.
The deal is the first co-sponsored transaction from Mosaic and Goldman since the bank agreed to purchase $300 million of loans from the Oakland, California-based solar finance company in September last year (PFR, 9/8). The loans backing the transaction include collateral purchased by Goldman as well as loans that Mosaic still held on its own balance sheet.
Goldman also acted as lead manager and initial purchaser on the deal.
The transaction is backed by a pool of loans on residential rooftop solar systems made to mostly prime borrowers with an average FICO score of 741. Despite the focus on prime credit, Kroll flagged a handful of risks to investors, including a lack of performance data on the long-term loans in the deal.
Additionally, Mosaic has some issues around “financial condition and liquidity”, according to the rating agency, which notes that the company has operated with negative cash flow since it was founded and reported a loss of $26.9 million for 2017.
Before this offering, the most recent solar securitization to be sold was from Vivint, which priced a $466 million deal backed by leases and power purchase agreements on June 6 via Credit Suisse and Citi. The same company sold a $344 million private ABS transaction at the same time, bringing its total capital markets funding to $811 million.