Citi and Renew Financial issue ABS backed by energy efficiency loans

July 14, 2015
Citi and Renew Financial issues US$12.58m ABS backed by energy efficiency loans (6yrs, 3.51%, A), as part of WHEEL, a Pennsylvania Treasury initiative ALT ENERGY STOCKS: Citi and Renew Financial issued US$12.58m of climate-aligned asset-backed securities. Although not labelled as green, we include this deal in our universe of unlabelled climate-aligned bonds. The deal is the first ABS issuance arising from the US-based Warehouse for Energy Efficiency Loans (WHEEL). WHEEL is a public-private partnership established in 2014 with the State of Pennsylvania Treasury. The set-up is that approved local contractors offer low-cost loans to customers to finance energy efficiency projects, which are then bought into a financial warehouse by the company Renew Financial. To do this, Renew Financial uses a credit facility capitalised by a mix of public money, from the Pennsylvania Treasury, and private money, from the commercial bank Citi. This process continues until the aggregated amount of loans in the warehouse meet the size requirements of the capital markets, and the loans are bundles together and sold to institutional investors as securities backed by energy efficiency loans. Brilliant to see private sector actors collaborating with state and local governments to get the deal off the ground. This is exactly the kind of collaborative setups we need to have to rapidly grow a green securitisation market, in the US and globally. Bravo all involved! Originally published in Alt Energy Stocks