STOWE, VT — Maple Eaves Inn proprietor Marian Holcombe closed Friday on a $4.2 million asset-backed note collateralized entirely by the projected color of fourteen sugar maples on her property between October 7th and October 21st, making her, by most measures, the first innkeeper in North America to securitize a tree.
The notes pay quarterly off room-rate cash flows — $389 a night, two-night minimum, no children, no dogs that have ever been described as ‘a lot’ — and are sliced into three tranches by week, with the senior piece priced to a leaf-peeper occupancy assumption of 94%. The prospectus is typeset in Garamond and includes a four-color insert of last October’s canopy that one underwriter described as ‘frankly, lickable.’
‘The credit risk isn’t demand, it’s chlorophyll,’ said Pell Whitcomb, a climate-correlation analyst at the policy desk of a Big Four firm, eating a turkey sandwich over a printout of GDD anomalies. ‘Warm Septembers are pushing peak color into the fourth week of October, which is outside the bond’s collection window. We’re modeling a 1-in-7 year where she’s selling rooms against a tree that is, technically, still summer.’
Holcombe has hedged the exposure through a foliage swap with a counterparty inn outside Sherbrooke, Québec, whose maples historically peak roughly twelve days earlier and whose owner, in turn, is hedged against an Adirondack property running a week behind. The chain, three deep, is held together by a single shared spreadsheet and a Vermont attorney named Dale who answers email between 6 and 7 a.m.
Bondholder Henry Forman, a retired endodontist from Short Hills who took down a $25,000 slice of the Class B notes, said he was attracted to the yield and also that he had separately booked Room 4 for the weekend of October 11th. ‘I’m long the inn and I’m staying at the inn,’ he said, in a sentence his financial advisor has reportedly asked him to stop using.
Moody’s, which has not yet rated the structure but is observing it with what one source called ‘professional curiosity bordering on a hobby,’ has a junior analyst stationed on the roof of his Subaru Outback in the Stowe Walmart parking lot with a NIST-certified colorimeter, taking daily readings off two reference maples and uploading them to a Bloomberg chat called LEAF-1. As of Friday afternoon, the trees were registering what he described in the chat as ‘mostly still doing a green thing.’
S&P assigned the senior tranche a BBB- rating with a negative outlook, citing climate, foot traffic out of Logan, and a single line in the offering memo noting that one of the fourteen pledged maples ‘has a situation with its bark.’ Holcombe, asked whether she was concerned about the rating, said she was more concerned about the muffins, which she had not yet started.
The notes mature in 2027. The trees do not.