Congratulations to HB+D client, Clean Fund, for closing a “Watershed” energy efficiency securitization and PACE commercial financing.

June 21, 2014 at 5:19 pm | Blog, Clean Tech-Energy-Utilities, Energy Efficiency-Renewables, Real Estate | No comment

 

Clean Fund’s purchase of bonds represents the first known securitization of commercial energy-efficiency loans, and it may be the event that finally unlocks institutional capital for efficiency finance. Now that the securitization concept is proven, it’s only a matter of time before big money throws its weight behind energy efficiency. Former U.S. Vice President Al Gore mentions the transaction at OECD’s Green Investment Financing Forum in Paris, France (June 2014) as an example of the important role of green banks. Jason A. Hobson of HB+D represented Clean Fund in this noteworthy transaction.

Clean Fund purchased $24 million of a $30 million bond issuance to fund Connecticut’s green bank, the Clean Energy and Finance Authority (CEFIA), sold bundle a sizable chunk of its C-PACE loan portfolio to Clean Fund. The bonds, issued by the Public Finance Authority, are backed by $30 million of commercial PACE loans funding energy efficiency in commercial buildings in the state of Connecticut.

The commercial assets included in the securitization represent a diversified portfolio of property owners funded through a $40 million CEFIA warehouse program, including a major commercial office building in Middletown, a YMCA in Danbury, and a strip mall in Norwalk. The portfolio also features 750 kW of solar PV systems. An estimated twenty to 30 properties will be included in the $30 million portfolio. The assets have an average life of 8.77 years, the senior bonds issued have a coupon of 5.1 percent, and Clean Fund’s price net of discount equates to 96 percent of par. The selldown will take place in three separate events in tranches of approximately $10 million apiece between now and the end of 2015.

Clean Fund is a PACE investor across the country. It has closed deals in multiple states and hopes to support $1 billion in PACE projects, both as a direct lender and through the purchase of existing assets.

See article in Greentech Media: http://www.greentechmedia.com/articles/read/the-first-known-commercial-efficiency-securitization

 

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