KBRA Assigns Preliminary Ratings to Dividend Solar Loans 2017-1

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three
classes of notes issued by Dividend Solar Loans 2017-1, LLC (“DIV
2017-1”). This is a $128.95 million term ABS securitization
collateralized by a pool of $135.7 million residential solar loans. The
transaction that is expected to close on October 6, 2017.

This transaction is Dividend Finance, Inc.’s (“Dividend” or the
“Company”) first securitization. The Notes are backed by a pool of
mostly prime quality residential consumer solar loans and underlying
Solar Energy Systems. Credit enhancement for the Notes consists of i)
overcollateralization ii) subordination (in the case of Class A and
Class B Notes) iii) excess spread and iv) amounts on deposit in the
reserve account. The loan collateral in the transaction will include a
pool of $135.7 million residential solar loans (approximately $129.5
million of “Initial Solar Loans” at closing plus $6.2 million of
prefunded “Subsequent Solar Loans”) from seven different loan products
that contain a combination of interest-only periods, payment deferral
periods and required or optional prepayment thresholds.

Dividend is a California based specialty lender providing financing in
the clean energy space through residential solar loans in addition to
residential and commercial PACE assessments. Dividend was formed through
the merger of Dividend Solar, Inc. and Figtree Finance Company in 2016.
Dividend originates loans in 25 states through its state lending
licenses where required. Loans typically have original balances of
$10,000 – $50,000 (but may exceed this amount); original loan terms of
12 or 20 years and fixed interest rates of 2.50% – 9.99% (but may
step-up if certain incentive payments are not made).

KBRA applied its General Rating Methodology for Asset-Backed Securities
as part of its analysis of the transaction’s underlying collateral pool
and the proposed capital structure. KBRA also conducted an operational
assessment of Dividend in March 2017, as well as a review of the
transaction’s legal structure and transaction documents. KBRA will
review the operative agreements and legal opinions for the transaction
prior to closing.

Representations & Warranties Disclosure

All Nationally Recognized Statistical Rating Organizations are required,
pursuant to SEC Rule 17g-7, to provide a description of a transaction’s
representations, warranties and enforcement mechanisms that are
available to investors when issuing credit ratings. KBRA’s disclosure
for this transaction can be found in the report entitled Dividend
Solar Loans 2017-1 Representations and Warranties.

Related Publications: (available
at www.kbra.com)

• Dividend
  Solar Loans 2017-1 Pre-Sale Report

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About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a
Nationally Recognized Statistical Rating Organization (NRSRO). In
addition, KBRA is recognized by the National Association of Insurance
Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Analytical Contacts:
Kroll Bond
Rating Agency
Eric Neglia, 646-731-2456
Senior Director
eneglia@kbra.com
or
Rosemary
Kelley, 646-731-2337
Senior Managing Director
rkelley@kbra.com
or
Cecil
Smart, Jr., 646-731-2381
Senior Director
csmart@kbra.com
or
Usman
Khan, 646-731-2488
Associate
ukhan@kbra.com