KBRA Affirms Rating on SunStrong 2018-1 Issuer, LLC
13 Dec 2024 | New York
KBRA affirms its rating on the Class A Notes of SunStrong 2018-1 Issuer, LLC (SunStrong 2018-1), a residential solar lease securitization, and removes it from Watch Developing. The rating was initially placed on Watch Developing on December 21, 2023 due to the financial health of SunPower Corporation (SunPower). SunPower, at the time of the Watch Developing placement, was both the sub-manager of the transaction, responsible for providing all administrative, collection and other management services for the SunStrong 2018-1, as well as 51% direct owner of SunStrong Capital Holdings, LLC (SunStrong or Manager), the transaction’s manager. The remaining 49% of the Manager was indirectly owned by Hannon Armstrong Sustainable Infrastructure Capital (HASI).
On August 5, 2024, SunPower filed a voluntary petition for relief under Chapter 11 of U.S. Bankruptcy Code, and as part of their bankruptcy proceedings, sold their ownership and assets in SunStrong. The assets and ownership of Sunstrong were purchased and are now jointly owned by Goodfinch and HASI. As a result, SunPower is no longer an owner of the transaction’s Manager. The Manager has delegated its responsibilities to SunStrong Management, LLC (sub-manager). Sub-manager subcontracted billing and collections to Launch Servicing, LLC and operations & maintenance (O&M) to a network of contractors and third party established O&M businesses.
KBRA’s analysis indicated that the existing credit enhancement for the notes is sufficient to support the outstanding rating. The data used for this review is as of the November 2024 payment date. To date, the securities have received timely interest payments.
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