Stream Innovation is returning to the capital markets to raise $242.8 million, secured by a collateral pool of loans that finance the installation of home efficiency products.
This is Stream Innovation's third securitization since it first came to market in 2024, and in this deal the underlying collateral has slightly higher seasoning and a slightly higher weighted average (WA) FICO score, according to Kroll Bond Rating Agency. In addition to sponsoring the deal, Stream Innovations will service the loans, sell them to the transaction, and is taking on the role of administrator.
The deal will sell notes to investors through four tranches—classes A, B, C and D. They all have a legal final maturity date of Sept. 15, 2045. More of the underlying loans are also in the highest tier of FICO scores, compared with the previous deal, according to the rating agency.
The notes benefit from several forms of credit enhancement, including subordination. Overcollateralization representing about 2.70% of the pool balance, initially, building to a target of 5.70%; and a reserve account representing 0.50%, also boost credit to the notes. Excess spread amounting to 3.40% of the pool balance also boost the notes' credit.
Stream Innovation 2025-1 also has a two-month prefunding feature, and during that time the $199.6 million in receivables is slated to expand to $249.6 million. Purchased receivables must conform with certain concentration limits, including the WA original term and minimum WA FICO score.
KBRA assigns AA-, A-, BBB- and BB- to classes A, B, C and D.
