With well-subscribed deal – first to include Missouri PACE bonds – Renovate America expands investor base for its green bonds
SAN DIEGO, Dec. 8 – Renovate America, a leading provider of home improvement financing, today announced the closing of its 12th securitization of HERO Property Assessed Clean Energy (PACE) green bonds.
The securitization, HERO Funding 2017-3, included $267,330,000 of class A1 and A2 notes rated AAA by Morningstar, AA (sf) by Kroll and AA (sf) by DBRS, and $34,000,000 of class B notes rated BBB (sf) by DBRS. The deal was well-subscribed, with several new asset management firms joining the ranks of Renovate America’s investors.
“Renovate America remains the PACE market leader, having issued more than $2.8 billion in PACE bonds across 12 securitizations,” said Nicole Montecalvo, Head of Investor Relations at Renovate America. She noted that Renovate America issued $775 million in PACE bonds across three deals in 2017, which is 70% more in broadly syndicated ABS bonds than the next-largest PACE provider.
The projects backed by the bonds in HERO Funding 2017-3 are expected to lower homeowners’ water and energy bills by more than $289 million over the useful lifetime of the products installed. Projects covered by this securitization are also estimated to have created more than 1640 jobs.
The notes are initially secured by HERO PACE assessments levied on 8,118 residential properties in 39 California counties and eight Missouri counties. The initial PACE assessments have an average balance of approximately $23,764.30, a weighted annual interest rate of 6.77 percent and a weighted-average original term of 17.36 years. The underlying bonds in the initial pool were originated between Aug. 16 and Nov. 1 of this year.
The HERO bond platform is the largest platform that solely produces green ABS bonds, with each of the company's 12 securitizations having been designated as green by Sustainalytics, an investment research firm specialized in environmental, social and governance (ESG) research and analysis. HERO bonds also adhere to the Green Bond Principles, a set of commonly agreed standards in the capital markets on what constitutes a green bond.
HERO green bonds have received significant interest, in part, because they do not fund aspirational or speculative projects; the proceeds have already been invested in residential energy efficiency, renewable energy, and water efficiency projects whose environmental impact is verified.
About Renovate America
Renovate America offers a tech-enabled financing platform for home improvement and commercial retrofits that empowers communities to modernize and make their housing stock more efficient, while giving small businesses the tools they need to grow. In addition to financing home improvements through an unsecured lending product, Benji, Renovate America offers communities HERO financing. HERO is the leading residential Property Assessed Clean Energy (PACE) program in the U.S. and has been used by the owners of over 110,000 homes to make energy and efficiency improvements. It is estimated that HERO is on track to save billions of dollars in energy and water bills, and has created over 23,000 local trade jobs that cannot be offshored or automated. Renovate America has built the world’s largest green bond platform, with a volume of originations that enables securitization of HERO PACE bonds multiple times a year, attracting international investment to meet U.S. clean-energy objectives.