SunStrong Capital Holdings is sponsoring a deal to securitize revenue from a pool of residential solar leases on homes primarily in California, Arizona and New York.
The transaction, SunStrong Issuer 2025-1, will raise $900 million from investors through a structure with three tranches. Notes are anticipated to repay in October 2032, with a final maturity date of December 2055, according to Kroll Bond Rating Agency.
The underlying pool of 64,024 leases are related to photovoltaic systems owned by four project companies, SunStrong 2025-1 Resi Owner, Dorado I Residential Solar, Dorado 2 Residential Solar and Juniper 1 Residential Solar, KBRA said.
ATLAS SP Securities is the deal's structuring agent, the deal will issue four tranches of class A, B and C notes, and an R class of subordinate notes, according to KBRA.
In terms of the capital structure, the notes benefit from overcollateralization of about 6.0%, calculated as the excess of the securitization share of the assets' aggregate discount solar asset balance (ADSAB) over the note principal.
They benefit from credit enhancement in the form of overcollateralization, a liquidity reserve account, a supplemental reserve account, excess spread and subordination—for the class A notes. Also, the class B notes confer
additional credit enhancement to the class A notes, in an amount representing 13.0% of the note balance.
KBRA assigns ratings of A+ and BBB- to classes A and B.
