Sunnova Energy is preparing to sponsor a $297.9 million asset-backed securities deal, the Sunnova Helios VIII Issuer, 2022-A. The transaction will issue notes from a collateral pool with slightly looser credit profile than its previous deal.
Credit Suisse Securities and Popular Securities will purchase the notes initially, in a deal with a couple of slight changes to the underlying collateral’s credit profile. About 3.3% of loans in the deal fall into the 600-649 FICO bucket on the current Sunnova Helios VIII, 2022-A, compared with a 1.2% level in the Sunnova 2021-C deal, according to a presale report from Kroll Bond Rating Agency. Still, both transactions limit the concentration of loans in the 600-649 FICO bucket to 2% of the prefunded pool, KBRA said.
As of the cutoff date, underlying borrowers in the deal had a WA FICO score of 736, according to KBRA.
Sunnova Helios 2022-A is the sixth term loan ABS deal secured by residential solar loans. The notes will be backed by a pool of mostly prime quality residential loans financing solar energy systems, including photovoltaic (PV) or Energy Storage Systems (ESS), or both.
The collateral pool size is $425.6 million, and $121.6 million of that will be prefunded at closing, KBRA said. The trust will purchase additional solar energy loans within three months after the closing date.
The deal sponsors also made some changes to its major forms of credit enhancement, namely initial overcollateralization (OC) and target overcollateralization. Sunnova 2022-A has 17.7% of initial OC, compared with 12.5% on the 2021-C deal. The current deal has a target OC of 19.5%, compared with 14.2% on the 2021-C transaction.
KBRA expects to assign ratings of ‘AA-’ to the $131.9 million class A notes; ‘A’ to the $102.2 million class B notes, and ‘BBB-’ to the $63 million class C notes, KBRA said.
In terms of the deal’s structure, Sunnova 2022-A features initial credit enhancement of 64.7%, 36.5% and 18.9% on classes A, B and C notes, respectively, KBRA said. Sunnova 2022-A includes an Equipment Replacement Reserve Account, unfunded at closing.
