GoodLeap Sustainable Home Solutions is returning with a $271.3 million securitization deal, a transaction secured by a pool of loans to mostly prime credit quality homeowners, which finance home improvements, including solar panel systems and batteries.
Since last year, GoodLeap had expanded its product offering to include Home Efficiency Loans, which funds a range of improvements such as LED lighting, heating venting and air conditioning, home performance upgrades and generators, according to a pre-sale report from Kroll Bond Rating Agency.
Solar Loans and Home Efficiency Loans are collectively referred to as "Sustainable Home Improvement Loans," the types of financing that will secure the transaction, GoodLeap Sustainable Home Solutions Trust, 2022-4, known as GOOD 2022-4.
Lime Residential is sponsoring the deal, and Credit Suisse Securities, Goldman Sachs & Co., and Citigroup Global Markets are initial note purchasers. S&P Global Ratings expects the deal to close on November 8.
GOOD 2022-4 has an initial credit enhancement of 24.08% on the class A notes, based on a percentage of the deal's adjusted pool balance, a -0.80% change from GOOD 2022-3, according to KBRA. Initial credit enhancement levels on classes B and C are expected to be 19.34% and 13.96%.
KBRA note that its expected lifetime cumulative net loss (CNL) on the notes is 8.75%, which is 0.05% higher than the level projected for the previous deal, due to the pool composition. There is proportionately more lower-credit quality and longer-term loans underpinning the current transaction's collateral pool than in previous deals, the rating agency said.
In one potential credit negative, the pool of loans is highly geographic concentrated. Borrowers located in Texas represent 27.2% of the outstanding principal balance, with California (15.2%), Florida (14.6%), Arizona (8.3%) and Nevada (4.0%) following, according to KBRA. Florida's high concentration of borrowers also posed a concern to observers, especially because Hurricane Ian had made landfall on the state's southwest coast, causing fatalities, flooding and property damage, the rating agency said.
"It will take time to assess the ultimate impact of the storm," analysts wrote, but added "consumers will likely experience temporary financial hardship as they recover from the powerful storm."
KBRA expects to assign ratings of 'A' to the $239.7 million, class A notes; 'BBB' to the $14.8 million, class B notes and 'BB+' to the $16.7 million, class C notes. S&P expects to assign similar ratings to the notes.
All of the notes have a final scheduled payment date of November 20, 2054.
GoodLeap Sustainable Home Solutions is returning with a $271.3 million securitization deal, a transaction secured by a pool of loans to mostly prime credit quality homeowners, which finance home improvements, including solar panel systems and batteries.
Since last year, GoodLeap had expanded its product offering to include Home Efficiency Loans, which funds a range of improvements such as LED lighting, heating venting and air conditioning, home performance upgrades and generators, according to a pre-sale report from Kroll Bond Rating Agency.
Solar Loans and Home Efficiency Loans are collectively referred to as "Sustainable Home Improvement Loans," the types of financing that will secure the transaction, GoodLeap Sustainable Home Solutions Trust, 2022-4, known as GOOD 2022-4.
Lime Residential is sponsoring the deal, and Credit Suisse Securities, Goldman Sachs & Co., and Citigroup Global Markets are initial note purchasers. S&P Global Ratings expects the deal to close on November 8.
GOOD 2022-4 has an initial credit enhancement of 24.08% on the class A notes, based on a percentage of the deal's adjusted pool balance, a -0.80% change from GOOD 2022-3, according to KBRA. Initial credit enhancement levels on classes B and C are expected to be 19.34% and 13.96%.
KBRA note that its expected lifetime cumulative net loss (CNL) on the notes is 8.75%, which is 0.05% higher than the level projected for the previous deal, due to the pool composition. There is proportionately more lower-credit quality and longer-term loans underpinning the current transaction's collateral pool than in previous deals, the rating agency said.
In one potential credit negative, the pool of loans is highly geographic concentrated. Borrowers located in Texas represent 27.2% of the outstanding principal balance, with California (15.2%), Florida (14.6%), Arizona (8.3%) and Nevada (4.0%) following, according to KBRA. Florida's high concentration of borrowers also posed a concern to observers, especially because Hurricane Ian had made landfall on the state's southwest coast, causing fatalities, flooding and property damage, the rating agency said.
"It will take time to assess the ultimate impact of the storm," analysts wrote, but added "consumers will likely experience temporary financial hardship as they recover from the powerful storm."
KBRA expects to assign ratings of 'A' to the $239.7 million, class A notes; 'BBB' to the $14.8 million, class B notes and 'BB+' to the $16.7 million, class C notes. S&P expects to assign similar ratings to the notes.
All of the notes have a final scheduled payment date of November 20, 2054.
