Mosaic completes largest solar loan securitization to date

Mosaic solar financing

Mosaic, a leading U.S. provider of solar loan financing solutions for homeowners, completed its second term securitization of residential solar loans. The Mosaic Solar Loans 2017-2 transaction is the largest solar loan securitization issued to date, with $307.5 million in bonds sold across four tranches. MSAIC 2017-2 generated over $1.7 billion in investor orders and was ultimately placed with 29 institutional investors based in the U.S. and Europe.

Solar loans represent 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 funded more than $1.3 billion in solar loans since inception and expects to continue to be a frequent issuer in the securitization market.

“After the overwhelming success of our first securitization, we knew there was deep and broad demand from investors to fund residential solar loans,” said Billy Parish, co-founder and CEO of Mosaic. “We are excited that this transaction both extends our relationships with existing investors and brings in new U.S. and international buyers.”

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The offering consists of $307.5 million of notes rated by Kroll Bond Rating Agency with four tranches that carry ratings from “A” to “BB+”. The notes are modeled to a weighted average life of approximately 4.1 years and are backed by an initial collateral pool of $275 million of loans with an average FICO score of 738. An additional $75 million of loans may be purchased during the 3-month supplemental purchase period, based on defined eligibility criteria. Given the strong oversubscription levels, all tranches priced inside initial guidance levels, achieving an all-in yield of 4.2% and significant spread compression compared to the MSAIC 2017-1 transaction.

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