Mosaic, a leading provider of financing solutions for residential solar and energy-efficient home improvement projects in the U.S., announced it has closed a $280 million securitization of residential solar loans. With overwhelming investor interest in Mosaic's high-quality assets, the offering was multiple times oversubscribed and was placed with over 25 institutional investors, deepening the relationship with existing investors and attracting nine new participants.
Mosaic was also recently named winner of the "Esoteric ABS Deal of the Year" by GlobalCapital for its November 2019 $208 million Mosaic Solar Loans 2019-2 transaction. The award honors outstanding achievement in U.S. structured finance, and nearly 2,300 market experts cast votes to determine the winners.
"Our ability to securitize solar loans in this challenged market environment is a vote of confidence in solar energy as an asset class. It is also a testament to how the financial markets value Mosaic's consistent performance and high-quality standards," said Billy Parish, founder and CEO of Mosaic. "This securitization represents the highest level of investor demand we have ever seen and demonstrates the market's appetite for our clean energy-backed assets."
Closed on June 25, the $280 million offering consists of four tranches of notes rated by Kroll Bond Rating Agency from "AA-" to "BB+" with weighted average lives ranging from 1.95 to 5.06 years. The notes are backed by $315 million of solar loans with a weighted average FICO score of 753. Given the strong oversubscription, all tranches priced inside initial guidance levels.
"Solar asset-backed securities are rising in popularity as institutional investors recognize their value for longer-term yield," said Alex Kaplan, senior director of capital markets for Mosaic. "We are proud to be acknowledged by our peers in the capital markets and appreciate the commitment of the banks that took this transaction to market."
More than $3.5 billion in solar loans have been funded through the Mosaic platform since its inception in 2012. Mosaic will continue to be a frequent issuer in the securitization market. The Mosaic Solar Loans 2020-1 transaction ("MSAIC 2020-1") is Mosaic's seventh solar loan securitization.
Deutsche Bank was the sole structuring agent, and Royal Bank of Canada and BNP Paribas acted as joint bookrunners for MSAIC 2020-1. The bonds are designated as "Green Bonds" based on the International Capital Markets Association's standards and pursuant to a report issued by Sustainalytics US, Inc. The award-winning 2019 transaction was done with BNP Paribas and Deutsche Bank.
The securitization and award follow Mosaic's recent announcement of a $50 million expansion and two-year extension of its BNP Paribas warehouse facility earlier this year.
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