DBRS Morningstar Confirms Ratings on Renew Transactions

DBRS, Inc. (DBRS Morningstar) confirmed its ratings on all classes of securities included in four Renew transactions.

The confirmations are based on the following analytical considerations:

-- The transaction assumptions consider DBRS Morningstar’s baseline macroeconomic scenarios for rated sovereign economies, available in its commentary “Baseline Macroeconomic Scenarios for Rated Sovereigns March 2022 Update,” published on March 24, 2022. These baseline macroeconomic scenarios replace DBRS Morningstar’s moderate and adverse Coronavirus Disease (COVID-19) pandemic scenarios, which were first published in April 2020. Despite several new or increasing risks including the Russian invasion of Ukraine, rising inflation, and coronavirus variants, the overall outlook for growth and employment in the United States remains relatively positive.

-- Transaction capital structure and available credit enhancement.

-- The transaction benefits from credit enhancement in the form of overcollateralization, a reserve account, and excess spread. The senior note also benefits from subordination from the lower classes.

-- The ratings address the payment of timely interest on a semiannual basis and the payment of principal by their scheduled maturities. Residential property assessed clean energy (PACE) assessments are paid at the same priority as property taxes.

-- Legal considerations specific to PACE including validity in all relevant jurisdictions. The obligation to pay the PACE assessments is transferable. When a property is sold, the new owner is responsible for any outstanding PACE assessments and payment penalties as part of the purchase of the property. Additionally, protections are afforded to special revenue collections under Chapter 9 of the U.S. Bankruptcy Code and certain structural features, including a County Reserve Account, mitigate commingling risks associated with the servicing of PACE assessments by local county tax collection offices.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is the DBRS Morningstar Master U.S. ABS Surveillance (May 16, 2022), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

The rated entity or its related entities did not participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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