Kroll Bond Rating Agency Assigns Preliminary Ratings to HERO Funding 2017-1 Class A Notes
NEW YORK, NY (April 21, 2017) – Kroll Bond Rating Agency (KBRA) assigns a preliminary rating of AA(sf) to HERO Funding 2016-4 (HERO 2017-1) Class A1 Notes and Class A2 Notes (together, “the Class A Notes”). The notes are newly issued asset-backed securities backed by a portfolio of Property Assessed Clean Energy (PACE) bonds.
The notes are secured by an Initial PACE Bond Portfolio and a Subsequent PACE Bond Portfolio (together, “the PACE Bond Portfolio”), each consisting of limited obligation improvement bonds (each, a “PACE Bond”) issued by the Western Riverside Council of Governments (“WRCOG”), San Bernardino Council of Governments (SBCOG) and the County of Los Angeles, California (“LA County”, and together with WRCOG and SANBAG, “the PACE Bond Issuers”). The Initial PACE Bond Portfolio comprises 175 PACE Bonds with an aggregate principal balance of approximately $191.7 million and is secured by 8,275 PACE assessments levied against 7,447 residential properties (“PACE Assessments”) in 38 California counties. The average PACE Assessment is approximately $23,169 with an average annual payment of approximately $2,802. The Subsequent PACE Bond Portfolio is expected to consist of PACE Bonds with an aggregate principal balance of $47.9 million. The transaction benefits from credit enhancement in the form of excess spread, overcollateralization, and a liquidity reserve.