DBRS Places Property-Assessed Clean Energy (PACE) Deals Under Review with Positive Implications

DBRS, Inc. (DBRS) placed Under Review with Positive Implications the public ratings of 21 securities issued by ten U.S. asset-backed securities (ABS) transactions (the Transactions) that are backed by Property-Assessed Clean Energy (PACE) bonds (PACE Bonds).

The Transactions were placed Under Review with Positive Implications as a result of industry and regulatory developments affecting the origination and underwriting of PACE assessments, which back the PACE Bond portfolios that collateralize the Transactions being placed under review.

These developments are expected to have a positive impact on the performance of ABS transactions backed by PACE Bonds. DBRS anticipates the positive effect of such new developments will primarily benefit the Class A tranches of the Transactions. Class B tranches are expected to be confirmed at the current ratings.

The Transactions are:
-- HERO Funding Trust 2015-3
-- HERO Funding Trust 2016-1
-- HERO Funding Trust 2016-2
-- HERO Funding 2016-3
-- HERO Funding 2016-4
-- HERO Funding 2017-1
-- HERO Funding 2017-2
-- HERO Funding 2017-3
-- Renew 2017-1
-- Renew 2017-2

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 transaction parties’ capabilities with regard to origination, underwriting and servicing.
-- The credit quality of the collateral pool and historical performance.

Notes:
The principal methodologies are DBRS Master U.S. ABS Surveillance Methodology, 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 for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

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