Securitization

The solar ABS sector is set to hit a new record for issuance volumes in 2021 with the addition of Sunrun and Solar Mosaic’s transactions, as a wider pool of institutional investors join the market, encouraged by more frequent ratings from the three major credit rating agencies.

Sunnova Energy International is preparing to launch its fourth securitization backed by residential solar loans.

MUFG has introduced a new CLO asset class, bundling $500 million of project finance and infrastructure loans together for Starwood Property Trust in a deal that clearly demonstrated investor appetite for the product.

Securitization exists in the public consciousness primarily as a shadowy corner of the capital markets in which out-of-control financial engineering causes global economic meltdowns. Could it be due a reappraisal?

Residential solar finance company Mosaic’s foray into the recently reopened asset-backed securitization market was well received by investors, reaping a multiple-times oversubscribed order book, in part thanks to data that shows the pandemic having a limited impact on solar loans.

One of the first pieces of advice a retail stock investor receives after opening their first brokerage account or downloading the Robinhood app is not to try to “time the market.” But in corporate finance – especially during weak markets – timing is everything. If a window of opportunity opens after a period of volatility, you go for it.

Solar finance company Sunnova priced the first solar securitization of 2020, a $313.5 million dual-tranche offering, on Feb. 5.

While yield-hungry investors of all stripes are viewing distributed, small-scale solar companies ever more favorably, the founders and management of the target companies are finding that there are attractive alternatives to selling stakes in their businesses outright.

Residential solar finance company Sunrun is preparing a $312.4 million securitization deal backed by a portfolio of leases and power purchase agreements, marking the first time the issuer has tapped the ABS market twice in one year.

Solar finance company Mill City completed a $217.89 million residential solar loan securitization on July 24, bringing year-to-date volume of solar ABS to over $1.3 billion.