October remittance reports showed continued improvement in credit performance across securitized solar loan pools during the September collection period. Annualized net losses in KBRA’s Solar Loan ABS Index fell 23 basis points (bps) month-over-month (MoM) to 2.27%. Meanwhile, early-stage (30-59 days) delinquencies fell 4 bps MoM to 0.79%, and late-stage delinquencies increased 3 bps MoM, landing at 0.70% for the October reporting period. On a year-over-year (YoY) basis, the index has shown performance deterioration since last October, with net losses up 45 bps and early- and late-stage delinquencies up 21 bps and 13 bps, respectively (see Figure 1 and Figure 2).
The fall in annualized net losses and delinquencies came after recent highs in these metrics during the August collection period. The improvement in losses can be attributed to a strong recovery rate this month, improving 232 bps MoM, reaching the highest recovery level since May. Current index values, as well as MoM and YoY…