DBRS Assigns Provisional Ratings to CLEAN 2018-1

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes issued by CLEAN 2018-1:

-- $109,325,000 Class A Notes at AAA (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 overcollateralization, 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 value of the commercial properties that secure the underlying PACE Assessments relative to the outstanding balance of the Assessments and the priority of the Assessments being senior to a first-lien mortgage.

-- 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 Scheduled Maturity.

-- The capabilities of CleanFund Commercial PACE Capital, Inc. (CleanFund) with regard to origination and underwriting. DBRS performed an operational review of CleanFund and considers the Company to be an acceptable originator of PACE Assessments.

-- The legal structure and presence of legal opinions that address the true sale of the assets to the Issuer, the non-consolidation of the Issuer with the Transferor, that the Issuer has a valid first-priority security interest in the PACE Asset Portfolio and consistency with DBRS’s “Legal Criteria for U.S. Structured Finance” methodology.

-- Review of legal considerations specific to PACE.

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

The principal methodologies are Rating U.S. Commercial 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 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.