Redaptive Sustainability Services is bringing its inaugural energy-as-a-service securitization to market, selling $216 million in asset-backed bonds to investors through the Redaptive EAAS Issuer 2025-1 deal.
Founded in 2015, the sponsor provides critical infrastructure upgrades. The asset-backed securities (ABS) deal will sell bonds backed by a pool of 1,445 performance contracts from 46 obligors who are Fortune 500 commercial and industrial customers.
Deutsche Bank Securities structured and underwrote the deal, which has a final maturity date of March 2042, according to analysts at Kroll Bond Rating Agency.
Redaptive's portfolio consists of long-term Energy-as-a-Service (EaaS) contracts for lighting, HVAC and controls commercial and industrial customers with multiple locations
The new asset class brings a portfolio composed of about 49.9% fixed payment contracts, and 50.2% performance adjusted payment contracts, when measured by securitization value, KBRA said. On a weighted average (WA) basis, the leases have original terms of 115 months and a remaining term of 95 months, the rating agency said.
Redaptive EAAS Issuer 2025-1's structure includes overcollateralization, initially sized at 11.7% of the Aggregate Discounted Contract Value (ADCV), with a target of 14.0%.
Other structural elements are designed to maintain liquidity to the notes, including a cumulative net loss trigger and an average delinquency trigger.
There are also three liquidity accounts to help maintain liquidity to the notes, including a capitalized interest account. This mechanism will deposit about $253,993 from the net proceeds of the note sale on the closing date, which will be used to cover interest on the notes related to the amounts in the prefunding account.
The class A notes benefit from subordination in the class B notes, KBRA says. The deal also includes a liquidity reserve account, equal to $4.9 million, or 2.0% of the value of the contracts, KBRA said.
KBRA assigns ratings of A and BBB- to classes A and B notes.
