Sunrun, the company that installs and services residential solar systems and power purchase agreements (PPAs), plus originates and services the leases that finance them, is preparing to sponsor a $481 million securitization.
The leases and power purchase agreements will secure three tranches of notes issued through the Sunrun Pangea Issuer, 2025-2, according to Kroll Bond Rating Agency. All the notes have a final maturity date of January 2054, KBRA said. Asset Securitization Report's deal database notes that the deal is slated to come to market on Aug. 29, 2025.
Sunrun Pangea will repay interest to noteholders sequentially, and class B interest payments will be deferred until the interest and principal on the class A notes, and principal on the class B notes are repaid fully, according to KBRA.
The rating agency said the deal benefits from overcollateralization, which equals about 19.5% of the outstanding balance. There is also a liquidity reserve account that will be fully funded to its required amount when the deal closes, which is equal to six months of interest on the class A notes.
Sunrun's structure benefits the class A notes in other ways, too. For instance, the notes benefit from subordination from the class B notes, which provides 8.4% of additional credit enhancement, KBRA said.
The collateral pool is composed of 63,318 leases and PPAs related to solar panel installations, which have an average original and remaining tenor of 240 months and 122 months on the PPAs and leases, respectively. The PV systems' underlying customers have an average FICO score of 757, KBRA said.
Geographically speaking, the loans are concentrated. California, New York and Maryland represent about 65.3% of the number of PV systems and about 66.5% of the aggregate discounted solar asset balance (ASDAB).
KBRA assigns A- to the A1 and A2 notes and BB- to the class B notes.
