A California-based clean-energy financing company closed a $103 million bond offering backed by commercial loans supporting renewables, energy-efficiency and water and seismic-upgrade projects.
CleanFund Commercial PACE Capital Inc.’s bond deal is one of the first to bundle C-PACE obligations — commercial property assessed clean-energy — according to a statement Tuesday. PACE uses property tax liens to repay the debts. The portfolio comprises industrial, mixed-use, office and multi-family properties. DBRS rated the issue AAA.
The deal is “a validation that these assets can be assembled and rated highly, and generate a fixed-rate product that didn’t really exist,” Greg Saunders, CleanFund’s chief executive officer, said in an interview. “It’ll provide an impetus for greater institutional investor participation.”
Credit Suisse Group AG was the adviser and structuring agent on the deal, which is backed by $115 million of C-PACE assessments on 82 properties in California, Texas and four other states. The notes have a coupon of 4.25 percent, Saunders said.
He expects to do a similar-sized deal next year.
The CleanFund deal follows a $75 million offering completed in September by Greenworks Lending, the first securitization of solely C-PACE assets.