Secured residential solar loans will back the $235.7 million securitization coming to market from the Sunnova Helios X Issuer, Series 2022-C.
Sunnova Energy Corp., an independent solar power company based in Houston, is sponsoring the deal. This is Sunnova's eighth term loan securitization with secured residential solar loans as collateral, and Sunnova 2022-C's statistical pool is showing signs of borrowers with tighter credit qualifications, according to Kroll Bond Rating Agency.
On a weighted average (WA) basis for the 2022-C deal, the percentage of loans in FICO score buckets ranging from 741-840 were higher than that of the 2022-B, KBRA said.
The deal's initial overcollateralization level, as a percentage of pool balance, is lower than Sunnova 2022-B's, KBRA said.
The solar installer industry is a growing one, as FitchRatings notes. Companies are originating increasing volumes of receivables and the current federal administration is supportive through tax credits.
States are also supportive through legislative measures, with 38 states pursuing legislation to allow property assessed clean energy (PACE) financing, and about 30 states with active laws, according to PACENation, an industry advocacy group.
As for Sunnova Energy Corp., Series 2022-C, the solar loans generally finance consumers' purchase and installation of solar panel systems, with terms ranging from 10 to 25 years. Virtually all of the loans 97.9% reach their maximum terms, according to the rating agency. Of the portfolio, some 28.2% are loans financed photovoltaic (PV) systems with storage batteries, while 2.7% of the loans financed batteries on a standalone basis, according to Fitch.
On an aggregate basis, the transaction had an original principal balance of $391,083.2 million. Some 8,870 loans secure the pool, with an average original loan balance of $44,091, Fitch said.
On a weighted average (WA) basis, the solar loans have original terms of 24.8 years, borrowers had a FICO score of 735, and the loans were seasoned for two months, according to Fitch.
Most of the borrowers, 69%, have opted to service their loans through ACH payments, according to Fitch.
Credit Suisse Securities will purchase the notes from the trust initially, as it issues notes through three tranches.
Geographically speaking, Sunnova Helios 2022-C's exposure to Puerto Rico properties was 19.8%, down from 26.4%, KBRA said.
KBRA intends to assign ratings of 'AA-', 'A-' and 'BBB-' to the class A, B and C notes, respectively, while Fitch expects to assign ratings of 'AA-', 'A' and 'BBB-', to classes A, B, and C, respectively.
