Published on December 3rd, 2015 | by Roy L Hales2
Renovate America’s 5th Securitization Of PACE Bonds
December 3rd, 2015 by Roy L Hales
Originally published on the ECOreport
Since 2011, Renovate America has financed more than $1 billion in home improvements through its HERO program. This is a significant investment which is paid back over twenty years. Thus it is not surprising to read about Renovate America’s 5th securitization of PACE bonds.
Plans For 2016
“We have worked over the last three years to establish a proven asset class with PACE bonds. Now, we can also clearly demonstrate to investors the positive social and environmental impact of PACE improvements and their capacity to create clean energy jobs in local communities,” said CEO J.P. McNeill.
His company has big expectations for 2016. It has financed 90% of America’s residential PACE projects to date. More than 350 cities and counties have adopted the program, but all in California. McNeill says they intend expand into “four or five states.” The only names mentioned so far are Florida and New York, but these are negotiations rather than contracts.
They will need big money to carry out these plans.
Renovate America’s fifth securitization
Renovate America is issuing $201,532,000 in Class A Notes rated AA (sf) by Kroll and AA (sf) by DBRS, and representing 8,939 home improvements made that reduce energy or water consumption or produce renewable energy.
The company had to put in $207.8 million as collateral so it could issue $201.5 million in green bonds.
Sustainalytics, a leading global provider of ESG and corporate governance ratings and research, has verified that the selection process for Renovate America’s projects and products is robust, and investments in them will help to create more energy efficient homes.
Morgan Stanley is underwriting the inaugural green bond transaction.
Renovate America completed four prior securitizations of PACE Bonds between March 2014 and July 2015.
The PACE Program
It partners with local governments to provide the HERO PACE Program (Home Energy Renovation Opportunity), which allows homeowners to finance installations of energy-efficient products like HVAC, windows, and roofing; renewable and alternative products like solar; and water efficiency products for indoor systems and outdoor landscaping.
Homeowners make payments along with their property taxes, and in the event the property is sold, the remaining balance may be able to transfer to the new owner.