Sabal Issuer 2026-3 receives preliminary KBRA rating for solar-backed notes
Residential solar securitization activity continues with a new preliminary rating for Sabal Issuer 2026-3 LLC, backed by a large pool of customer leases and power purchase agreements. The collateral includes 16,137 contracts tied to photovoltaic systems, with a discounted solar asset balance of about $412.0 million and a securitization share of roughly $378.7 million.
Highlights
- Sabal Issuer 2026-3 LLC receives preliminary KBRA rating for notes backed by 16,137 residential solar leases and PPAs, totaling approximately $412.0 million in discounted asset balance.
- The securitization includes $378.7 million of the discounted solar asset balance, split roughly evenly between power purchase agreements (51.3%) and lease agreements (48.7%).
- Florida, California, and Arizona represent 40.3% of PV systems and 43.6% of asset balance, with a weighted average customer FICO score of 757 and original tenor of 300 months.
Transaction structure and collateral profile
As reported by KBRA, citing Kroll Bond Rating Agency, KBRA assigns a preliminary rating to one class of notes issued by Sabal Issuer 2026-3 LLC in a transaction backed by residential solar photovoltaic installations, some of which include energy storage equipment.The collateral pool consists of 16,137 leases and power purchase agreements. Based on a 7.5% discount rate, the total aggregate discounted solar asset balance stands at approximately $412.0 million, while the securitization share of that balance is about $378.7 million.
The portfolio is split almost evenly between contract types. By discounted solar asset balance, about 51.3% of the pool is made up of PPAs and 48.7% of lease agreements, while by PV system count the mix is about 51.1% PPAs and 48.9% leases.
Geographic concentration and credit characteristics
The largest state concentrations are in Florida, California, and Arizona. Together, those three markets account for about 40.3% of the number of PV systems and roughly 43.6% of the aggregate discounted solar asset balance.Contract duration in the pool is long-dated, with weighted average original and remaining tenor of 300 months and 297 months, respectively. The weighted average FICO score of underlying customers is 757, indicating a relatively strong borrower credit profile for the residential solar asset-backed sector.
In our earlier article, we covered how persistent geopolitical shocks and elevated fiscal spending are straining sovereign borrowers as refinancing costs stay high. We noted that the pressure is most acute in emerging and frontier markets, where interest-service burdens tend to be heavy relative to narrower revenue bases, and where energy- and food-price volatility can worsen inflation and credit outlooks.
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