DBRS Finalizes Provisional Ratings on Renew 2017-1

DBRS, Inc. (DBRS) has today finalized its provisional ratings on the following notes (the Notes) issued by Renew 2017-1:

-- $189,140,000 Series 2017-1, Class A Notes rated AA (sf)
-- $34,100,000 Series 2017-1, Class B Notes rated BBB (sf)

The ratings are based on DBRS’s review of the following analytical considerations:
-- Transaction capital structure, proposed ratings and form and sufficiency of available credit enhancement.
-- The ability of the transaction to withstand stressed cash flow assumptions and repay investors according to the terms under which they have invested. For this transaction, the rating addresses the payment of timely interest on a semi-annual basis and the payment of principal by the Legal Final Maturity.
-- The capabilities of Renew Financial Group LLC with regard to originations and underwriting.
-- The legal structure and presence of legal opinions that address the true sale of the assets to the Issuer, the non-consolidation of the Depositor with the Company, that the trust has a valid first-priority security interest in the Collateral and matters relating to Cayman Islands law and the consistency with DBRS’s “Legal Criteria for U.S. Structured Finance” methodology.
-- Review of legal considerations specific to property-assessed clean energy (PACE).
-- Servicing is performed by local county tax collection offices.

The Notes are secured by approximately (1) $146.2 million of PACE assets (PACE Assets) issued by the three PACE Bond Issuers: California Statewide Communities Development Authority, Florida Green Finance Authority and County of Los Angeles, California, and (2) up to $48.7 million of PACE Assets to be acquired post-closing.

Initial credit enhancement for the Class A Notes will consist of 3.00% overcollateralization (OC) in the PACE Asset Portfolio. There is also a liquidity reserve account, which is not funded at closing, but will gradually build up to 2.00% of the current PACE Asset Portfolio balance (subject to a $1.5 million floor). Additional credit support is provided from excess spread in the structure.

Credit enhancement for the Class B Notes primarily consists of Class A excess spread and the Class A OC (i.e., the 3% of principal collections not allocated to Class A.)

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodologies are Rating U.S. Property Assessed Clean Energy (PACE) Securitizations and Rating U.S. Structured Finance Transactions, which can be found on dbrs.com under Methodologies.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

Please see the attached appendix for additional information regarding sensitivity of assumptions used in the rating process.

The full report providing additional analytical detail is available by clicking on the link under Related Research at the right of the screen or by contacting us at info@dbrs.com.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.