Mosaic completes inaugural securitization of residential solar loans

Mosaic, provider of solar loan financing solutions for homeowners, has closed the first securitization of its residential solar loan portfolio.  The Mosaic Solar Loans 2017-1 transaction (“MSAIC 2017-1”) resulted in proceeds of $138.95 million and received a “Green Bond” designation based on the standards published by the International Capital Markets Association and pursuant to a report issued by Sustainalytics US, Inc.

This is the first securitization of consumer loans secured by residential rooftop solar systems by Mosaic.  Solar loans are a growing asset class that is gaining market share as consumers shift away from solar leases and increasingly choose to benefit from ownership of residential solar systems.  Mosaic has originated over $1 billion in solar loans since inception and expects to be a frequent issuer in the securitization markets.

“This is a huge step forward for the solar loan sector as well as for Mosaic,” said Billy Parish, Founder and CEO of Mosaic. “We have sustainable and scalable funding to support our partners. With such an enthusiastic response from the investor community, we know this is just the first of many offerings.”

The offering consists of a single tranche of $138.95 million rate notes rated “A” by Kroll Bond Rating Agency.  The notes are modeled to a weighted average life of 4.06 years and are backed by a collateral pool of $177.9 million of loans with an average FICO score of 746.   The deal generated overwhelming investor demand and achieved an oversubscription level of 5.6 times the offering size.   Final pricing at 4.50% yield with a 4.45% stated coupon was well inside of initial price talk. The deal settled on February 2, 2017.

Guggenheim Securities and BNP Paribas acted as joint-lead bookrunners for the offering.  Guggenheim Securities acted as sole structuring agent.