Renovate America, the nation’s leading provider of residential Property Assessed Clean Energy (PACE) financing in the U.S., announced that its first four securitizations, which were completed in 2014 and 2015, have been designated as green bonds. Sustainalytics, a leading provider of ESG and corporate governance research and ratings, provided a second opinion that the bonds adhere to the Green Bond Principles, and that the proceeds fund projects with environmental benefits.
The HERO Bond platform is now the first asset-backed securities (ABS) platform to solely produce green bonds, with each of the company’s six securitizations assessed by a second opinion provider. Renovate America has securitized $1.05 billion in PACE-backed securities through these six transactions.”Our platform is designed to consistently produce marketable securities that provide investors with a green investment opportunity and the ability to support a program that is helping make tens of thousands of homes more efficient,” said J.P. McNeill, Co-founder and CEO of Renovate America. “The cumulative environmental benefits of the assets backed by HERO Bonds are significant, real, and immediate.”
PACE green bonds have received substantial interest in part because they do not fund aspirational or speculative projects – the proceeds have already been invested in projects with verified environmental impact.”The HERO Bond platform has been very well received by the investment community, and we are actively looking for partners who want to grow their green portfolios,” said Craig Braun, Managing Director-Capital Markets of Renovate America. “Now that we have established an entirely green bond platform, we are seeking to align the products and securities that we produce with correlated pools of capital.”
Since 2011, the HERO Program has financed more than $1.4 billion in home improvements which will save more than $2.5 billion on energy bills, conserve more than 9 billion kWh of electricity, reduce emissions by more than 2.5 million tons, and save more than 3.8 billion gallons of water. The HERO Program has also created 12,000 jobs across California and has had a local economic impact of more than $2.5 billion.”Home energy use is a major contributor to global emissions, and the expansion of Renovate America’s platform will only help to increase the energy-efficiency of homes,” said Sustainalytics’ Executive Vice President of Advisory Services, Simon MacMahon. “We applaud Renovate America for its sustainability leadership and look forward to seeing the impact these bonds have on homeowners.”
Renovate America partners with local governments to provide its version of PACE, the HERO Program (Home Energy Renovation Opportunity), to homeowners who finance a wide variety of product installations to conserve water and energy. These installations include energy-efficient products like heating, ventilation and air conditioning (HVAC), windows, and roofing; renewable and alternative energy products like solar; and water efficiency products for indoor systems and outdoor landscaping. HERO is unique in that it provides 100% financing for energy and water saving products for up to 20 years with fixed interest rates designed to make payments affordable. Homeowners make payments along with their property taxes and in the event the property is sold, the remaining balance may be able to transfer to the new owner.
HERO is the largest and most successful residential PACE program in the United States. More than 397 cities and counties have adopted the program across California, including the cities of Los Angeles, San Francisco, San Diego, Sacramento, San Jose, Fresno, Riverside, Anaheim, Santa Ana, Bakersfield, and San Bernardino, among others.