A nationwide provider of consumer financing for residential solar power systems and energy efficiency projects has closed on the securitization of $83.78 million in loans and retail installment contracts.
San Francisco-based Spruce Finance Inc. called the package “the largest securitization of unsecured residential efficiency loans in the U.S. The two tranches include Class A notes with a coupon of 4.32 percent and repayment by 2022, as well as Class B notes at 6.9 percent and expected to be repaid by 2023.
“Spruce is growing financing volume more than 50 percent across both its home efficiency and residential solar business lines,” said Spruce CEO Nat Kreamer. “This securitization is the start of our program that will routinely offer efficiency and solar asset-backed securities to qualified investors and support long-term access to capital.”
Spruce’s efficiency lending business was established in 1974 and has provided origination, underwriting and financing for efficiency loans for Fannie Mae and several U.S. electric utility companies. Spruce has a deep pool of proprietary consumer finance and repayment data that offers important insight into how these assets perform.
Citi acted as sole structuring agent and sole bookrunner for the transaction.
“We are proud to partner with Spruce Finance to significantly expand the market for asset-backed securities backed by consumer energy efficiency loans,” said Marshal Salant, global head of alternative energy finance at Citi. “This transaction clearly shows the growing interest among investors in this new asset class. We look forward to continuing our work with Spruce to make financing for residential energy efficiency improvements available to even more U.S. homeowners.”
Spruce has raised more than $2 billion, including tax equity, debt, and corporate equity, from Fortune 100 corporations, power companies and major Wall Street banks, according to the release.
“Our ability to efficiently originate high-quality assets through our channel and our proprietary consumer data and analytics are key differentiators for Spruce,” said Kreamer.
Spruce has raised more than $2 billion and serves more than 50,000 homeowners in all 50 states and Washington, D.C. The firm was created out of the merger of Clean Power Finance Inc. and Kilowatt Financial LLC which closed in January.
Partners include include firms selling solar photovoltaic systems, roofers, insulation and heating and cooling contractors.