February remittance reports showed a general deterioration in credit performance across securitized solar loan pools during the January collection period. Annualized net losses (ANL) in KBRA’s Solar Loan ABS Index climbed to 1.51%, up 10 basis points (bps) month-over-month (MoM) and 30 bps year-over-year (YoY), while late-stage delinquencies (60-119 days) logged a fifth consecutive monthly increase, rising 9 bps MoM and 20 bps YoY to 0.57%. On a more positive note, the index’s early-stage delinquency rate fell 12 bps during the month to 0.49%, but this reading is still 13 bps above year-ago levels (see Figure 1 and Figure 2). The MoM rise in the index's ANLs was driven by elevated losses in 2022 vintage securitized loan pools (relative to previous vintages) across a number of issuers.
Solar loan prepayment rates (CPR) were down 2 bps MoM and 674 bps YoY, hitting a new cyclical low of 5.01%1 (see Figure 3 and Figure 7). The downward trend in…
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