Deal of the Year 2018 — Non-Traditional: Placer County Public Financing Authority

Placer County, California, made a commitment to help residents and businesses convert to clean solar power and improve their buildings’ energy and water efficiency.

The county’s eight-year-old mPower program uses Property Assessed Clean Energy financing — or PACE — in an effort to lower energy bills, increase efficiency, reduce reliance on foreign fuels, stimulate the local economy, and reduce greenhouse gas emissions.

It provides property owners with fixed-rate financing, raised through bonds that are repaid through voluntary contractual assessments on tax bills.

Since the program started in 2010, bonds have been warehoused by the county treasurer-tax collector. It was awaiting sufficient volume to bring them to the public markets.

That time came in 2018.

Placer County Public Financing Authority marketed its $39.8 million of mPower bonds as something of a “hybrid” security: a land-secured credit with cash flows similar to single family housing mortgage revenue bonds.

Selling them as municipal bonds allowed both individual and institutional investors to participate in the taxable green bond sale.

The senior bonds — supported by Build America Mutual insurance and surety policies — were two times oversubscribed. The transaction can serve as a “take-out financing” template for municipalities that choose to self-administer PACE programs.