KBRA Affirms Ratings on Osprey Securitization I, LLC
13 Dec 2024 | New York
KBRA affirms the ratings on the Class A Notes and Class B Notes for Osprey Securitization I, LLC, a commercial and industrial (C&I) solar ABS transaction secured by future project revenues from a portfolio of C&I photovoltaic (PV) systems. KBRA’s analysis indicated that existing credit enhancement for the notes is sufficient to support the outstanding ratings. The data used for this review is as of the October 2024 quarterly payment date. To date the noteholders have received timely interest payments.
The transaction is currently in early amortization as a result of the debt service coverage ratio (DSCR) current level of 1.03x being below the trigger level of 1.15x. As a result, beginning on the October 2024 quarterly payment date, a scheduled principal payment was owing and was paid to noteholders. However, approximately $500,000 of the $1,850,00 total scheduled principal payment, which should have all been paid to the Class A noteholders, was misallocated to Class B noteholders. The management of Distributed Solar Development, LLC (DSD or the Company), the transaction’s sponsor, expects the misallocated payment to be corrected on the next quarterly payment date in January 2025.
The affirmation is based on the existing credit enhancement available to the notes, without including any potential correction for the misallocated principal payments, as well as KBRA’s view that the DSCR will likely rise to at or above the 1.15x threshold by the next quarterly payment date in January 2025. If the DSCR improves, this would result in the transaction no longer being in early amortization. The improvement to the DSCR is expected based on projected revenues as well as the fact that, based on the transaction payment priorities, no scheduled principal is due on the next payment date.
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