Sunrun’s first securitization gets preliminary rating from Kroll

Written By: Tracy Dawson Roses
June 23, 2015

On June 23, Kroll Bond Rating Agency assigned preliminary ratings to two classes of notes from Sunrun Callisto Issuer 2015-1, LLC, Series 2015-1, a residential distributed generation solar securitization.

This transaction is Sunrun Inc.’s inaugural securitization. The transaction is secured by 7,893 photovoltaic (“PV”) residential solar installations and related contracts. Approximately, 68% and 32% of the contracts are in the form of power purchase agreements (“PPA”) and lease agreements, respectively. The revenues supporting the rated Notes are master lease payments secured by payments made by residential obligors under the PPAs and lease agreements, as well as payments due from a utility or federal, state or local government authority under a Performance Based Incentive Program.

The aggregate discounted solar asset balance of the securitization pool, consisting of the discounted present values of the PPAs and leases, is approximately $146.5 million. The transaction benefits from credit enhancement in the form of overcollateralization, excess cash flow, an interest reserve account, and an inverter replacement reserve account.

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).