Ygrene Announces $280 Million Securitization Transaction
November 15, 2017
Issued notes received a GB1 (Excellent) rating from Moody’s; most diversified PACE deal to date
Petaluma, CA – Ygrene Energy Fund, a national leader in resiliency and clean energy financing, today announced the completion of a $280 million securitization transaction. It is the most diversified Property Assessed Clean Energy (PACE) deal and the largest by Ygrene to date.
The transaction represents the fifth securitization sponsored by Ygrene. The issuer, GoodGreen 2017-2, has issued three classes of notes, securitized by a portfolio of mostly residential PACE assets that were used to finance over 10,600 projects covering resiliency, energy efficiency, renewable energy and water conservation projects. The projects are split nearly equally between California and Florida, with over 94% of projects dedicated to residential property improvements, with the balance for commercial property improvements. Most notably, over one-third of the projects financed are allocated for hurricane protection.
“At Ygrene, we believe in putting the consumer first. As demonstrated by the high percentage of assessments dedicated to hurricane protection, this begins with making resiliency financing available to a large group of Americans who might not otherwise be able to add these protections,” said Ygrene President and CEO, Rocco Fabiano. “Today’s transaction once again demonstrates the confidence the market has in the PACE asset-class and in Ygrene. The ultimate outcome of this securitization is a true win-win: Ygrene offers consumers more choice for important home improvements, while helping cities become more resilient, create job growth and meet clean energy goals.”
Moody’s Investors Service (“Moody’s”) has assigned a Green Bond Assessment of GB1 (Excellent) to the GoodGreen 2017-2 Trust Class A ($244.8 million), Class B ($6.8 million) and Class C ($28.8 million) Notes, totaling approximately $280 million; with final maturities in April 2053. Kroll Bond Rating Agency (KBRA) also assigned a preliminary rating to two classes of notes, noting that the transaction benefitted from credit enhancement in the form of excess spread, overcollateralization, a liquidity reserve, an interest reserve and, in the case of the Class A Notes, subordination of the Class B and Class C Notes. Morningstar also provided ratings of AAA, A, and BBB, respectively, being the only agency on the residual note.
Additionally, for the first time in the PACE industry, Ygrene attained a letter of credit for its liquidity reserve account requirement which allows draws on the full amount starting on the first payment date, which is viewed as a credit positive. The ability to attain this letter of credit demonstrates another level of investor and lender comfort for PACE, and in particular, the Ygrene program.
Ygrene currently operates across nearly 470 communities in California, Florida and Missouri. The program is available to nearly 35 million Americans and has financed projects for over 41,000 residential and commercial property owners. Hailed as one of the top 20 “world-changing” ideas by Scientific American Magazine, PACE financing is an innovative program that enables property owners to obtain 100-percent financing for seismic retrofits, energy- and water-saving upgrades, onsite renewable energy generation projects, hurricane protection and EV charging stations. Payments are made with property taxes and repaid over terms up to 20-plus years.
The first payment of the notes will be on April 15, 2018.
About Ygrene Energy Fund
Ygrene Energy Fund is a national leader in residential and commercial resiliency and clean energy financing. Founded in 2010, Ygrene’s award-winning, privately funded Property Assessed Clean Energy (PACE) program is revolutionizing the home improvement industry, making it easier for property owners to invest in their futures and a healthier environment. Ygrene is delivering greater choice for home and business owners by providing accessible and affordable financing for energy efficiency, renewables, water conservation, storm protection and seismic upgrades. Recognized as one of the fastest growing asset classes in the country, PACE has proven to be a successful tool for supporting public policy initiatives, all without the use of public tax dollars or credits. To date, Ygrene has provided over $1 billion of private capital to more than 400 local communities, creating thousands of jobs and investing millions into local economies across the U.S. Learn more atygreneworks.com.
Joaquin McPeek, Ygrene Energy Fund
Amanda Coyle, Sloane & Company