Renovate America issues $305 million in green PACE bonds

Written By: Stratton Report
June 6, 2016

renovate america

On June 6, Renovate America, announced the closing of $305 million in PACE bonds in the firm’s seventh securitization. The securitization is a designated green bond amd the largest PACE securitization ever completed to date, according to the firm, by any issuer.

The notes are rated AA (sf) by Kroll and AA (sf) by DBRS, secured by 13,432 PACE assessments levied on residential properties in 31 California counties. The PACE assessments have an average balance of approximately $24,433, a weighted-average annual interest rate of 7.96 percent and a weighted-average original term of 14.95 years.

The PACE assessments were originated between January 2016 and April 2016.

Renovate America’s CEO J.P. McNeill noted:

“This transaction is our most successful issuance so far in terms of the level of interest from investors including, for the first time, international investment. This private capital is directly benefitting homeowners and communities by lowering utility bills, reducing carbon emissions, and creating clean energy jobs. This all comes at no cost to taxpayers.”

The HERO Bond platform is the first asset-backed securities (ABS) platform to solely produce green bonds, with each of the company’s seven securitizations having been assessed by Sustainalytics. The company provided a second opinion that the bonds adhere to the Green Bond Principles, and that the proceeds fund projects with measurable environmental benefits.

Renovate America’s SVP for Capital Markets Adam Garfinkle remarked: “Investor interest in HERO Bonds is growing with each issuance because the bonds provide significant relative value versus bonds of similar credit and duration. Our core investor base remains solid and we add new investors with each transaction.”

Since 2011, the HERO Program has financed more than $1.5 billion in home improvements which Renovate believes will save more than $2 billion on energy bills.