Kroll Bond Rating Agency assigned preliminary ratings to four classes of notes issued by Dividend Solar Loans 2018-1. The $104.66 million term ABS securitization is collateralized by a pool of $110.17 million residential solar loans. The transaction is expected to close on April 19, 2018.

This transaction is Dividend Finance’s second securitization. The notes are backed by a pool of mostly prime quality residential consumer solar loans and underlying solar energy systems. Credit enhancement for the notes consists of overcollateralization, subordination (in the case of Class A, Class B and Class C notes), excess spread and amounts on deposit in the reserve account. The loan collateral in the transaction will include a pool of $110.17 million residential solar loans (approximately $92.4 million of “initial solar loans” at closing plus $17.8 million of prefunded loans from two different loan products that contain a combination of interest-only periods and required or optional prepayment thresholds.

Dividend Finance is a California-based specialty lender providing financing in the clean energy space through residential solar loans, home energy-related home improvement loans, as well as residential and commercial PACE assessments. Dividend was formed through the merger of Dividend Solar and Figtree Finance in 2016. Dividend originates loans in 31 states and the District of Columbia through its state lending licenses where required.