KBRA Preliminarily Rates Sunnova Hestia II Issuer, LLC Solar Loan Backed Notes, Series 2024-GRID1

KBRA has assigned preliminary ratings to two classes of notes issued by Sunnova Hestia II Issuer, LLC Solar Loan Backed Notes, Series 2024-GRID1, totaling $168.9 million in a residential solar loan ABS transaction.

This marks the second securitization under the Hestia program, which includes a partial loan guarantee from the U.S. Department of Energy. The initiative aims to provide loans for clean energy systems, with a commitment to allocate at least 20% of loans to customers with credit scores of 680 or lower, and a minimum of 10%, with a target of 20%, to homeowners in Puerto Rico.

The collateral securing the Guaranteed Loan Borrower consists of approximately $260.8 million in residential solar loans, with around $23 million prefunded at closing. The statistical pool of $237.8 million in residential solar loans includes various categories: PV Solar Loans under Sunnova’s Easy Own Plan Equipment Purchase Agreements (59.8%), PV/BESS Solar Loans under SunSafe Easy Own Plan Equipment Purchase Agreements (31.8%), and BESS Solar Loans under SunSafe Agreements (8.4%). Notably, 97.7% of the aggregate initial pool balance features original loan terms of 25 years.

Sunnova Energy Corporation, based in Houston, TX, is an independent solar power company and wholly owned subsidiary of Sunnova Energy International Inc. (“SEI”), a publicly traded entity. Established in January 2013, Sunnova provides affordable solar electricity to homeowners across more than 50 U.S. states and territories. The company offers its services through long-term residential solar service agreements (SSAs), including lease agreements, power purchase agreements (PPAs), and loan agreements. For this securitization, only loan agreements serve as collateral.

KBRA utilized its General Global Rating Methodology for Asset-Backed Securities and Consumer Loan ABS Global Rating Methodology, along with the Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology, in its evaluation. The assessment also included an operational review of Sunnova and an analysis of the transaction’s legal framework and documentation. KBRA plans to further scrutinize operative agreements and legal opinions before finalizing its assessment.

For access to ratings and relevant documents, please click here.

To view the full report, click here.

For more information on KBRA’s methodologies and disclosures, visit www.kbra.com.

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