Mosaic, a US provider of solar loans for homeowners, has completed their first securitization of solar loans. The Mosaic Solar Loans 2017-1 transaction (“MSAIC 2017-1”) resulted in proceeds of $138.95 million and received a “Green Bond” designation based on the standards published by the International Capital Markets Association and pursuant to a report issued by Sustainalytics US, Inc. Guggenheim Securities and BNP Paribas acted as joint-lead book runners for the offering. Guggenheim Securities acted as sole structuring agent.
Mosaic has originated over $1 billion in solar loans since the platform launched. The company said it expected to be a frequent issuer in the securitization market.
“This is a huge step forward for the solar loan sector as well as for Mosaic,” said Billy Parish, founder and CEO of Mosaic. “We have sustainable and scalable funding to support our partners. With such an enthusiastic response from the investor community, we know this is just the first of many offerings.”
The security consists of a single tranche of $138.95 million rate notes rated “A” by Kroll Bond Rating Agency. The notes are modeled to a weighted average life of 4.06 years and are backed by a collateral pool of $177.9 million of loans with an average FICO score of 746. The deal was said to have generated “overwhelming investor demand” and achieved an oversubscription level of 5.6 times the offering size. Final pricing stood at 4.50% yield with a 4.45% stated coupon. The deal settled on February 2, 2017.
Mosaic started as crowdfunding platform but has since morphed into an online lender using its own balance sheet to finance loans. The shift has allowed the company to scale rapidly to become a prominent player in the solar finance space.