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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Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.
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