The $109.3m single tranche deal, CLEAN 2018-1, is only the second rated commercial Property Assessed Clean Energy (PACE) deal to come to market, following an issuance from Greenworks Lending last year.
DBRS assigned the single-tranche deal a preliminary AAA rating in a July 9 presale.
A Credit Suisse-led deal that had been slated for July or August 2017 never actually materialised.
PACE deals securitize loans taken out by property owners to finance energy efficiency improvements or renewable energy installations.
Unlike residential PACE deals, mortgage lenders must sign off on a commercial PACE securitization deal. This sometimes complicates the process, as PACE loan repayments are senior to the property’s mortgage.
The PACE assets included in this deal are secured by a pool of PACE assessments at 82 properties spread across six states.
California houses the bulk of these properties, with 45 of them situated in the Golden State, with an additional 31 properties located in Connecticut and three more in Missouri.
The portfolio also includes individual properties in Colorado and Ohio, as well as Texas, whose Butler Brothers Building in Dallas represents 20.27% of the principal balance. That building and the other top four properties represent a 59.83% majority of the PACE assets.
PACE assets included in the deal have a weighted average annual interest rate of 6.19% and a weighted average original term of 22.9 years.