Mosaic Solar Loan Trust is planning a return to the securitization market, hoping to raise $205.7 million in asset-backed notes secured by consumer loans that financed the purchase of residential solar systems.
In a couple of notable differences from the program's previous deal, the Mosaic 2022-3 deal has a slightly heavier weight toward longer-term loans. Specifically the collateral pool has 4.05% more 25-year loans than the previous deal, and the concentration of 20-year loans decreased by 3.85%, according to a pre-sale report from Kroll Bond Rating Agency.
Loans with FICO scores of less than 680 make up a smaller percentage of the pool, at 13.0%, compared with 18.2% for the Mosaic 2022-2.
Although KBRA said it had observed performance trends in the static pool data, increased percentages of higher FICO collateral in the pool mix resulted in a lower overall KBRA base case loss assumption, the rating agency said.
BNP Paribas Securities and Deutsche Bank Securities are initial note purchasers on the deal, which will issue notes through four classes, KBRA said.
Mosaic originates solar loans through its partnerships with more than 1,400 active installers and dealers throughout the country, and the portfolio appears to be fairly diversified. The top installer for loans in the portfolio accounts for 17.0% of the pool, and the next largest installer accounts for 8.5%, according to KBRA.
As for credit enhancements on the notes, KBRA says that the notes had total initial credit enhancement, as a percentage of the total adjusted pool balance, of 49.2% on the class A notes; 15.21% on the class B; 9.67% on the class C notes and 7.24% on the class D notes.
The notes will also benefit from a yield supplement overcollateralization (YSOC) amount, which is slated to be about $89.5 million, or 29.1% of the total adjusted pool balance.
KBRA expects to assign 'AA-' on the $114 million, class A notes; 'A-' on the $74.3 million, class B notes; 'BBB-' on the $12.1 million, class C notes and 'BB-' on the $5.3 million, class D notes.
All of the notes have a legal final maturity date of June 20, 2053.
