Mosaic secures $307 million more against its loan portfolio

It’s startling to realize that the second-largest residential solar loan provider in the United States started as a niche financing company five years ago.

Yet with its second securitization of its residential-solar loan portfolio of 2017 – $307 million in bonds sold across four tranches – Mosaic is now the industry heavyweight its founders always envisioned it would be.

In this year alone, Mosaic has secured $447 million in funding using its solar-loan portfolio as collateral. The latest round of funding is a 122% increase in funds over the February round, which netted $139 million.

The Kroll Bond Rating Agency rated the four tranches of this latest offering “A” to “BB+”, and the notes are modeled to a weighted average life of approximately 4.1 years. The oversubscribed offering brought an all-in yield of 4.2%.

The company says the $307 million is the largest solar loan securitization issued to date – increasing the amount of money it’s devoted to solar loans to $1.3 billion – and it says this securitization will not be its last.

“We are thrilled with the tremendous interest in this deal and what it means for the solar industry,” said Billy Parish, co-founder and CEO of Mosaic. “After the overwhelming success of our first securitization, we knew there was deep and broad demand from investors to fund residential solar loans.  We are excited that this transaction both extends our relationships with existing investors and brings in new U.S. and international buyers.”

As consumers have started moving away from leases to loans, Mosaic has staked its position as a solar-loan specialist – but it is hardly the only company to use its solar assets as collateral this year.

Sunnova used its lease/power-purchase agreement (PPA) portfolio to raise $615 million in April, and Tesla/SolarCity – the pioneer of the practice – announced last week that it planned $340 million transaction against its lease/PPA portfolio.