DBRS Morningstar Assigns New Rating to GoodGreen 2018-1

DBRS, Inc. (DBRS Morningstar) assigned a new rating to the following note issued by GoodGreen 2018-1 (the Transaction):

-- $254,040,498 Class A Notes at AAA (sf)

The note is currently also rated by our affiliated rating agency, Morningstar Credit Ratings, LLC (MCR). In connection with the ongoing consolidation of DBRS Morningstar and MCR, MCR previously announced that it had placed its outstanding ratings of the notes Under Review–Analytical Integration Review and that MCR intended to withdraw its outstanding rating; such withdrawal will occur on or about December 9, 2019. In accordance with MCR’s engagement letter covering the note, upon withdrawal of MCR’s outstanding rating, the DBRS Morningstar rating will become the successor rating to the withdrawn MCR rating. Information about the MCR rating, including the history of the MCR rating, can be found at https://ratingagency.morningstar.com/MCR/ratings-surveillance/transaction-detail/GoodGreen%202018-1.

The rating is based on a review by DBRS Morningstar of the following analytical considerations:

-- Transaction capital structure, rating and form and sufficiency of available credit enhancement.
-- Credit enhancement in the form of a subordinated note, overcollateralization, a liquidity reserve and excess spread.
-- Credit enhancement levels sufficient to support the DBRS Morningstar expected delinquency 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 rating addresses the timely payment of interest on a semi-annual basis and the payment of principal by the Scheduled Maturity.
-- The capabilities of Ygrene Energy Fund Inc. (Ygrene or the Company) with regard to originations and underwriting.
-- DBRS Morningstar performed an operational review of Ygrene 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 assets to the Depositor, the non-consolidation of the Depositor with Ygrene, that the issuer has a valid first-priority security interest in the PACE Asset Portfolio and consistency with DBRS Morningstar’s “Legal Criteria for U.S. Structured Finance” methodology.
-- Review of legal considerations specific to PACE.
-- Each of the Golden State Finance Authority, the Coachella Valley Association of Governments and the County of Yolo, California, had validation judgments issued by the California Superior Court that confirm that the PACE special tax liens and PACE Special Taxes 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 Green Corridor Property Assessed Clean Energy District had a validation judgment issued by the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida, confirming that the PACE Assessments are valid and enforceable obligations that conform to all federal and state laws. The judgment also 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 Florida Constitution.

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 & Criteria.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar 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 related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at [email protected].

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