Public Commentary: This page addresses originators, institutional investors and warehouse providers. It is not a securities offer or solicitation.
Solar PV Loan Securitizations — Converting Loan Pools into Tradable Bonds
Warehouse capacity is finite, tax-equity windows open and shut, and origination targets keep rising. A solar ABS unlocks capital tied up in funded loans, letting your platform scale without balance-sheet strain. FG Capital Advisors structures and places transactions from USD 100 million up, navigating rating models, investor appetite and green-label frameworks with candid feedback at every step.
Guide Navigation
1. What Is a Solar PV Loan Securitization?
A securitization transfers a diversified portfolio of rooftop or C&I solar instalment loans into a bankruptcy-remote trust. Cash-flows from borrowers service a series of notes, each carrying a distinct credit profile. Rating agencies gauge performance history, structural protection and market stress scenarios; investors select tranches that match their risk and duration targets; you receive up-front liquidity and retain ongoing servicing revenue.
2. Typical Structures We Arrange
| Tranche | Target Rating* | Tenor / WAL | Credit Enhancement |
|---|---|---|---|
| Class A Senior Notes | A/A- | 3–6 yrs / 2.5–4 yrs | OC 10–15 %, sub-notes, excess spread |
| Class B Mezzanine | BBB/BBB- | 4–7 yrs / 4–5 yrs | OC 5–7 %, excess spread |
| Residual Certificates | Not Rated | Pass-through | Receives tail cash once notes pay down |
*Indicative only; final ratings follow agency review of collateral metrics and structural terms.
3. Investors & Key Stakeholders
- Insurance companies & pension funds: Anchor Class A tranches for predictable cash-flow and ESG alignment.
- Credit-focused asset managers: Seek yield in mezzanine slices with transparent covenant packages.
- Impact-driven funds: Often take residuals to capture upside and report CO 2 displacement.
- Trustees & servicers: Provide cash-management, reporting and performance monitoring.
- Rating agencies: Kroll, Moody’s and S&P provide credit opinions and green-bond assessments.
4. Our Process
| Phase | Main Tasks | Typical Duration |
|---|---|---|
| Pool Review & Mandate | Data-tape audit, stratification analysis, loss-curve benchmarking | 1 week |
| Structuring & Rating Model | Tranche sizing, stress scenarios, preliminary rating feedback | 3 weeks |
| Investor Pre-Marketing | Indicative IOIs, comparable ABS comps, pricing framework | 2 weeks |
| Documentation & Roadshow | OM drafting, legal diligence, investor presentations | 3-4 weeks |
| Pricing & Settlement | Book-build, allocation, DTC settlement | 1 week |
5. Risk Controls & Covenants
- Performance triggers: Advancement rates and cash sweeps linked to delinquency, FICO and DSCR thresholds.
- Liquidity reserve: 1–2 % of note balance to ensure timely interest in servicing transitions.
- Over-collateralization: Prefunding haircut maintains Class A coverage at defined loss levels.
- Backup servicing: Contracted onboarding within 30 days of servicer default.
- Tax-equity consents: Prevents cross-default with partnership-flip vehicles.
6. Execution Timeline
When data tapes are clean and legal diligence is straightforward, a standard solar ABS runs from signed mandate to bond settlement in 10–12 weeks.
Next Step
Managing at least USD 100 million in funded solar PV loans and considering a securitization? Contact FG Capital Advisors for an upfront structuring review and draft term sheet.
This guide is informational. Engage independent legal, tax and accounting advisers before pursuing any securities issuance.
