TIP Solar ABS 2025 Issuer is preparing to market $183.3 million in asset-backed securities (ABS) to investors, secured by lease cashflows on residential solar equipment and power purchase agreements (PPAs).
GoodLeap, a longstanding name in the residential solar industry, originated the contracts in the collateral pool, a diverse pool of 7,765 leases. Jaguar Solar Owner 2024 owns the PV systems, and at closing TIP Solar ABS Issuer will have an investor member issuer in Jaguar Solar, according to analysts at Kroll Bond Rating Agency.
The securitization's share of the aggregate discounted solar asset balance (ADSAB) PV6 and PV7.5 is $272.6 million and $233.6 million, according to KBRA.
TIP Borrower Holdings is sponsoring the deal, known as TIP 2025-1, the deal will issue two tranches of class A and B notes, KBRA said. Asset Securitization Report's deal database notes that the transaction is slated to close on October 31. ATLAS SP Securities, a division of Apollo Global Securities, is the deal's manager, according to KBRA.
KBRA assigns A- and BBB- to classes A and B, respectively.
Credit enhancement mechanisms include overcollateralization, subordination, a liquidity reserve account and a supplemental reserve account, KBRA said. The reserve account will be fully funded to six months of interest on both classes of notes.
Excess spread will fund the liquidity reserve, in case of a shortfall in interest, KBRA said. Also, to cover certain costs, including equipment replacement, $1 million in excess cashflows must be deposited into a supplemental reserve account from November 2030 to October 2035, the rating agency said.
TIP 2025-1 will repay interest sequentially, and principal repayments will follow a repayment schedule, depending on whether the situation calls for an early amortization period or a sequential interest amortization period.
During a sequential interest amortization period, interest on the class B notes will be deferred until the interest and principal on the class A notes and class B's outstanding principal amount are all paid in full, KBRA said.
This creates additional subordination for holders of the class A notes, and it works out to be a credit boost—but not so much for holder of the class B notes, according to KBRA.
