The Western Riverside Council of Governments’ (WRCOG) latest securitization of Property Assessed Clean Energy (PACE) bond priced 10 basis points wider than the issuer’s previous bond, which was completed in April.
HERO Funding Trust 2015-2 priced $159.8 million of AA’ rated, class A notes at 190 basis points over interpolated swaps. Kroll Bond Rating Agency rated the transaction.
The HERO 2015-2 pool is more geographically diverse that HERO 2015-1 but is backed by a smaller smaller portfolio of PACE loans than the previous deal: 7,558 PACE assessments levied against 7,456 residential properties.
By comparison, 2015-1 is backed by a portfolio of 11,282 PACE assessments levied against 11,011 residential properties in 21 counties. Each PACE bond is used as collateral is secured by assessments levied on residential properties in represented California counties.
HERO 2015-2 is also structured with a shorter tenor. The notes have a weighted average life of 7.58 years, compared with the 10-year notes issued from the previous deal, HERO 2015-1.
WRCOG launched its HERO program in 2012. The council’s residential PACE loan program is administered and funded by Renovate America, a San Diego based company founded in 2008. Renovate America is directly responsible for developing and marketing the program and originating each assessment.
HERO 2015-2 is the fourth PACE securitization and increased the total volume of issuance from the trust to $473 million. Kroll has rated all four transactions and Deutsche Bank Securities is the structuring agent on each of the deals.
