Last week, California's Western Riverside Council of Governments (a consortium of local governments) issued a $103.8 million bond backed by PACE loans (Property Assessed Clean Energy) for work such as weather sealing, insulation upgrades or solar-panel installations.
Interest rate was 4.75%. Kroll gave the bond an AA rating.
This is billed in a Bloomberg story as the "first homeowner energy efficiency securitization". Kudos to the Councils and to structurers Deutsche Bank. We want to see more of these!
Energy efficiency investments in buildings are important to reducing emissions. There are some issues about the type and level of energy savings required to make a real difference to climate change and it will be useful for investors concerned about climate issues know the level of ambition needed and then achieved across a loan portfolio like this.
We do have an international Green Property Working Group looking at this at the moment, so watch this space.
PACE bonds have been going for some years - they were originally pioneered by Berkeley City Council, then suffered some setbacks (see our previous writing on this). The good news is that they seem to be making a slow come-back.
The best place to follow the PACE story is in the news pages of our friends at www.pacenow.org.
