April remittance reports showed improved credit performance across securitized solar loan pools during the March collection period. Annualized net losses in KBRA’s Solar Loan Index came in at 1.54%, logging a 38 basis point (bps) month-over-month (MoM) decline, driven by decreased gross losses in a handful of 2022 vintage securitizations (see Figure 1). Meanwhile, early- (30-59 days) and late-stage (60-119) delinquencies improved 2 bps and 7 bps MoM, respectively, to reach 0.50% and 0.48% (see Figure 2).
Prepayment speeds (CPR) climbed 151 bps MoM to 6.83% in our Solar Loan Index, posting a second consecutive MoM increase following a 24-month downtrend (see Figure 3). Although this may indicate that prepayment rates have already reached their nadir, CPR will likely remain near low levels, due to a slowing housing market, weaker consumer credit fundamentals, and relatively lower interest rates on existing solar loans compared to other consumer loan products, which discourages borrowers…