Greenworks Lending Completes First Rated Securitization of Commercial PACE (C-PACE) Assets
- Morningstar Credit Ratings, LLC, a Nationally Recognized Statistical Ratings Organization (NRSRO) is the first to rate new commercial PACE asset class.
- Note purchase led by TIAA Investments, an affiliate of Nuveen.
- Guggenheim Securities leads placement of $75 million.
- First C-PACE securitization establishes a distinct asset class.
- Public/Private program (C-PACE) is a growing capital source for small to midsize commercial real estate market.
DARIEN, Conn., September 25, 2017 (Newswire.com) - Greenworks Lending, a specialty finance company dedicated to commercial property assessed clean energy (C-PACE) today announced it has closed the first securitization of its type. The securitization arranged by Guggenheim Securities with TIAA Investments (an affiliate of Nuveen) as the lead investor, will net proceeds of $75 million.
This is the first securitization of solely commercial PACE (C-PACE) assets by any lender in the nation. C-PACE programs are public-private partnerships approved at the state level. They allow for commercial properties, including industrial, retail and multifamily buildings to finance energy saving infrastructure and repay the investment through a property tax assessment. Greenworks Lending has originated C-PACE financing, better known as C-PACE assessments, in seven states across numerous industries and property types since its inception in 2015. Through its national growth and industry leadership, the young firm led by Co-founders Jessica Bailey and Alexandra Cooley anticipates being a frequent issuer in the securitization markets.
"We are pleased with the opportunity to invest in this PACE securitization," said Chris Miller, Director, Private Investments at TIAA Investments. "We believe this investment benefits from an exclusive focus on commercial properties, property level cash flows that are senior to mortgage debt and strict underwriting criteria."
"This is a milestone moment for the commercial PACE industry, as well as for Greenworks Lending," said Jessica Bailey, Co-founder and CEO of Greenworks Lending. "We built our company with the goal of bringing capital to building owners who want to improve their properties and reduce their energy consumption. This deal is an important step in furthering that mission, while also promoting smart solutions to climate change and spurring local economic development."
"We see a tremendous amount of investor interest in the C-PACE market," said Vickie Tillman, President of Morningstar Credit Ratings. "Being part of the first transaction in this growing asset class provides us with a great opportunity to provide the market with insightful analysis and thought leadership."
Prior to the securitization, Greenworks Lending recently expanded its lending capacity by securing a credit facility with ING Capital. Alexandra Cooley, Co-founder and CIO of Greenworks, explained that the two infusions of capital position the firm to continue to grow in terms of geographic markets served and generation of assets for securitizations.
Cooley added, "The securitization, our ability to secure robust and flexible warehouse capacity with leading providers like ING, the first-ever C-PACE rating and institutional investor appetite speaks to our best-in-class underwriting standards coupled with effective origination strategies."
PACENation is the national non-profit that represents all PACE market stakeholders engaged in commercial and residential PACE. It helps develop PACE policy, encourages PACE program expansion, and connects energy services contractors, building owners and capital providers. David Gabrielson, Executive Director of PACENation said, "The PACE market has been anticipating the first commercial PACE securitization and it's no surprise that Greenworks Lending is behind it. The Greenworks leadership team has played an important longstanding role developing commercial PACE opportunities and we congratulate them on this milestone for our market and applaud their success."
About Greenworks Lending:
Greenworks Lending provides financing to commercial property owners to make their buildings more energy efficient or install clean energy systems through a structure called Property Assessed Clean Energy (PACE) which allows repayment to be made through the property tax bill. PACE can provide 100 percent of the hard and soft costs and allows building owners to use energy savings to cover the repayment. Based in Connecticut, Greenworks Lending was founded by developers of the most successful state commercial PACE program in the country. Upgrades financed by the team at Greenworks Lending have increased building owners' bottom lines by over $150M. Since its founding in 2015, Greenworks Lending has become the outsourced finance partner for hundreds of energy contractors across the country, financed a wide range of energy measures, and supported the development of dozens of commercial PACE markets across the country. The leadership team has been honored by the White House and sits on the board of PACENation.
About the C-PACE program:
C-PACE makes it possible for owners of commercial properties to obtain low-cost, long-term financing for energy efficiency, water conservation, renewable energy projects, and more. The program starts with a state level government policy that classifies clean energy upgrades as a public benefit – like a new sewer, water line, or road. These upgrades can be financed with no money down and then repaid as a benefit assessment on the property tax bill over a term that matches the useful life of improvements and/or new construction infrastructure (typically 20 years). The assessment transfers on sale and can be passed through to tenants where appropriate. While facilitating sustainability efforts among the largest consumers of energy (businesses), the program saves property owners money by ensuring that the combination of energy savings and incentives is generally greater than the cost of repayment.
Source: Greenworks Lending