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Petros closes on 2nd rated commercial PACE securitization

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Austin, Tex.-based Petros PACE Finance has closed on its second securitization of commercial property assessed clean energy financing in a privately placed transaction.

Petros, in a press release issued this week, said the deal was rated by DBRS but did not disclose the rating.

Reached by telephone, Petros co-founder and chief financial officer Jim Stanislaus said the deal involved a pool of multiple projects from 10 states. It is the second rated deal for Petros, after it closed on the first-ever rated single-asset C-PACE transaction earlier this year.

Petros served as its own placement agent and structuring agent on the transaction, using a platform from data firm T REX Group to match up with investors. The TREX platform provides potential investors with information on the performance of the commercial property assessments as well as the commercial mortgage securitizations and bond programs the properties themselves may be rolled into.

Securitization of commercial PACE securitization lags residential PACE securitization, due to constraints that include required lender consent for borrowers to take out PACE lien for energy efficiency and retrofit upgrades including solar panelization.

According to the PACENation industry organization, 21 states have active programs for PACE financing in the business space. Three states – Pennsylvania, Illinois and Utah – had legislation passed to enact or expand C-PACE programs this year.

To date, only two financing firms have sponsored publicly rated commercial PACE securitizations, Greenworks Lending and CleanFund. According to PACENation, there have been roughly $712 million in cumulative commercial PACE financings through mid-September, nearly doubling the prior year-end level.

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Property Assessed Clean Energy