Press Release

DBRS Finalizes Provisional Ratings on Renew 2018-1

Other
June 22, 2018

DBRS, Inc. (DBRS) finalized its provisional ratings on the following classes of notes issued by Renew 2018-1 (the Issuer):

-- $147,342,000 Class A Notes at AAA (sf)
-- $4,556,000 Class M Notes at AA (sf)
-- $17,800,000 Class B Notes at BBB (sf)

The ratings are based on a review by DBRS of the following analytical considerations:

-- Transaction capital structure, proposed ratings and form and sufficiency of available credit enhancement.
-- Credit enhancement is in the form of subordination, a liquidity reserve and excess spread. Credit enhancement levels are sufficient to support the DBRS-expected default and loss severity assumptions under various stress scenarios.
-- 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 ratings address the timely payment of interest on a semi-annual basis and the payment of principal by the Legal Final Maturity.
-- The capabilities of Renew with regard to originations and underwriting.
-- DBRS performed an operational review of Renew and considers the Company to be an acceptable originator of property assessed clean energy (PACE) Assessments.
-- The legal structure and presence of legal opinions that address the true sale of the PACE Assets to the Issuer, the non-consolidation of the Issuer with the Depositor, that the Issuer has a valid first-priority security interest in the PACE Asset Portfolio and the consistency with DBRS’s “Legal Criteria for U.S. Structured Finance.”
-- Review of legal considerations specific to PACE.
-- California Statewide Communities Development Authority, Los Angeles County and Western Riverside Council of Governments had validation judgments issued by the California Superior Court that confirm that the PACE Bonds and underlying PACE Assessments are valid and enforceable obligations that conform to all federal and state laws. In addition, the judgments ruled that the PACE Assessments do not constitute a taking of private property without due process of law in violation of the fifth and 14th Amendments to the U.S. Constitution or the California Constitution.
-- The Florida Green Finance Authority also had a validation judgment issued by the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida, that confirms that the PACE Assessments are valid and enforceable obligations that conform to all federal and state laws. In addition, the judgment also ruled, similar to the California validations, that the PACE Assessments do not constitute a taking of private property without due process of law in violation of the fifth and 14th Amendments to the U.S. Constitution or the Florida Constitution. Furthermore, the Florida Supreme Court ruled on an appeal to a PACE validation judgement and affirmed the Florida Circuit Court’s validation of the Florida Development Finance Corporation special assessment revenue bonds pursuant to the Florida PACE-enabling legislation.
-- Servicing is performed by local county tax collection offices.
-- Commingling risks associated with the servicing of PACE Assessments by local county tax collection offices in California and Florida are mitigated by the protections afforded to special revenue collections under Chapter 9 of the U.S. Bankruptcy Code and certain structural features, including a County Reserve Account.

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 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.

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

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

Ratings

Renew 2018-1
  • Date Issued:Jun 22, 2018
  • Rating Action:Provis.-Final
  • Ratings:AAA (sf)
  • Trend:--
  • Rating Recovery:
  • Issued:US
  • Date Issued:Jun 22, 2018
  • Rating Action:Provis.-Final
  • Ratings:AA (sf)
  • Trend:--
  • Rating Recovery:
  • Issued:US
  • Date Issued:Jun 22, 2018
  • Rating Action:Provis.-Final
  • Ratings:BBB (sf)
  • Trend:--
  • Rating Recovery:
  • Issued:US
  • US = Lead Analyst based in USA
  • CA = Lead Analyst based in Canada
  • EU = Lead Analyst based in EU
  • UK = Lead Analyst based in UK
  • E = EU endorsed
  • U = UK endorsed
  • Unsolicited Participating With Access
  • Unsolicited Participating Without Access
  • Unsolicited Non-participating

ALL MORNINGSTAR DBRS RATINGS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS AND ADDITIONAL INFORMATION REGARDING MORNINGSTAR DBRS RATINGS, INCLUDING DEFINITIONS, POLICIES, RATING SCALES AND METHODOLOGIES.