A pool of loans that finance energy efficiency home improvement projects, which are installed by Power Home Remodeling Group, are expected to collateralize $302.4 million in asset-backed securities from the latest Stream Innovations 2026-1 Issuer Trust.
The current series, STRE 2026-1, is expected to have a prefunded pool balance that is 31.1% of the aggregate pool balance, higher than the 20% balance on the STRE 2025-1, says Kroll Bond Rating Agency.
STRE 2026-1's prefunding period will be subject to certain concentration limits, the rating agency said. It added that the deal also permits a maximum weighted average (WA) FICO score of 766, just three points lower than the 769 maximum for the STRE 2025-1, KBRA said.
The deal will issue notes through four tranches of class A, B, C and D notes, with the bulk, $264.9 million through the class A notes, according to KBRA. Notes are expected to mature on Aug. 15, 2046, and the pool balance, $210.5 million, falls within the typical balance for transactions from the Stream Innovations platform.
The rating agency assigns AA-, A-, BBB- and BB+ to the notes, respectively.
The deal has a number of structural credit enhancements, including overcollateralization. The initial and target O/C levels are 1.00% of the outstanding pool balance, KBRA said, lower than the 2.70% and 5.70% seen on the STRE 2025-1 transaction, the rating agency said.
The notes also benefit from a reserve account representing .50% of the outstanding pool balance.
STRE 2026-1's notes also benefitted from excess spread of 4.40%, which was higher than the 4.01% on the previous series, 2025-1.
The deal has other strong credit protections. If a Cumulative Net Loss should occur, then interest on all outstanding subordinated classes of notes can be deferred until the interest and principal on the most senior class is paid in full or the event that triggered the paydown is resolved.
