Esoteric ABS

Fitch Ratings said Tesla Finance enters the residential solar finance ABS arena with underlying loans that have the highest WA FICO score presented to it for a rating.

The notes receive credit enhancement from overcollateralization, and an initial reserve.

Compared with other tax lien transactions, PVOne 2023-1 has a much smaller initial redemption value, and has one of the lowest numbers of liens, at 9,681. Its weighted average loan-to-value (LTV) ratio is 8.8%.

The specialty finance company is contributing all of the collateral for the $259.7 million deal; by comparison, the previous deal included collateral contributed by Goldman Sachs.

Just 5.1% of the $91 million of liens backing the transaction are vacant, down from 9.2% of the prior deal; this allowed the sponsor to borrower more heavily against the value of hte collateral.

Requiring solar panels for all newly constructed residences is good news for investors who finance these systems, if only because it will help keep developers afloat, according to Moody’s Investors Service.

A class action filed last week alleges that Renovate America and Renew Financial failed to provide consumer protections promised to L.A. County, that this constitutes elder abuse, and the county is complicit.

The Show Me State passed legislation enabling residential and commercial PACE financing in 2010; however, Renovate America only started funding assessments through the Missouri Clean Energy District three months ago, in August 2017.

The latest deal features slightly higher exposure to Florida, where Renew has not been operating as long as it has in California.

It's the sponsor's first securitization to be rated by Morningstar; DBRS and Kroll Bond Rating Agency are still capping their ratings of Property Assessed Clean Energy bonds at double-A.