The ratings on the Class A Notes of SunStrong 2018-1 Issuer, LLC (“SunStrong 2018-1” or the “Issuer”), a residential solar lease transaction, have been on Watch Developing due to the financial health of SunPower Corporation (“SunPower”) since late last year. Earlier this week, on August 5, 2024, SunPower filed a voluntary petition for relief under Chapter 11 of U.S. Bankruptcy Code.

While the filing could cause disruption to the transaction, Launch Servicing, LLC., was recently appointed as sub-servicer on August 1, 2024 and is responsible for all billing and collections activities on SunStrong 2018-1. This may help mitigate performance issues relating to collections. GreatAmerica Portfolio Services Group LLC serves as transition manager if there is a manager termination event. The termination events per the transaction documents include, among other events, the bankruptcy, insolvency, receivership or reorganization of the manager or the sub-manager continuing for 60 days.

Currently, SunStrong Capital Holdings, LLC (“SunStrong”), which is jointly owned 51% directly by SunPower and 49% indirectly by Hannon Armstrong, serves as manager. The manager is responsible for providing all administrative, and other management services for the Issuer and in respect of the managing members. SunStrong, although obligated to ensure all services are performed, has delegated substantially all of its responsibilities to SunPower Capital Services, LLC, an indirect wholly owned subsidiary of SunPower, as sub-manager. KBRA will continue to monitor the developments and implications of SunPower’s bankruptcy, as well as possible manager transitions and performance of the SunStrong 2018-1 transaction.

To access ratings click here.

Related Publications

• KBRA Maintains Watch Developing Placement on SunStrong 2018-1 Issuer, LLC
• KBRA Places Rating on SunStrong 2018-1 Issuer, LLC on Watch Developing

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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