GoodFinch, an ESG focused asset manager with an initial investment strategy focused on residential home-efficiency fixed income assets, announced the closing of its inaugural securitization of $301 million of residential solar loans. The securitization is backed by loans originated through the Loanpal platform and were contributed by GoodFinch, Goldman Sachs and Loanpal. GoodFinch Fund I, LP is the Sponsor of the transaction, with Barclays and Goldman Sachs acting as Joint Bookrunners.
GoodFinch was founded by clean energy veterans Hayes Barnard, Tanguy Serra and Andrew Mills. Using the advantage of their deep industry knowledge, GoodFinch was launched to target strong performing residential solar and home efficiency loans that help homeowners lead a more sustainable life. To date, GoodFinch has raised two funds and sourced warehouse capital from Barclays and others to purchase $600 million worth of residential solar loans.
"We have strong conviction around the performance of residential solar loans. Homeowners who are choosing to invest to improve their homes are making a strong statement about their outlook and their current financial situation. Moreover, with mortgage rates at all-time lows, prepay speeds are underestimated in the market," said Tanguy Serra, co-founder and Chief Investment Officer of GoodFinch. "Loans originated on the Loanpal platform re-opened the renewable credit markets in June and this securitization, with a cost of capital of 3.27%, further supports the robust demand in the marketplace for clean energy assets."
GoodFinch's inaugural securitization, co-issued by Loanpal Solar Loan 2020-2 Ltd. and Loanpal Solar Loan 2020-2 LLC, consists of $252 million of rated notes, with ratings provided by Kroll Bond Rating Agency. The collateral consists of 10- to 25-year loans with coupons ranging from 2.99% to 6.99% and an average FICO® score of 743. The senior tranche priced at a spread of 240 bps, and the all-in spread cost was 289 bps. GoodFinch has conviction around the solar assets' strong lifetime performance, and will retain the Class R Notes as sole sponsor of the transaction for the purposes of risk retention.
"We are pleased to continue our work leading the development, broadened appeal and application of green and sustainable financing products. In this way, we know that we can help to prove that finance is a driving force in helping the world to transition more quickly towards a zero carbon future," said Rohit Chaku, a Managing Director at Barclays.
"This is our fifth securitization of Loanpal solar assets and we continue to be impressed with quality of loans generated on the Loanpal platform," said Katrina Niehaus, Goldman Sachs Managing Director.
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