KBRA Assigns Preliminary Ratings to Driven Brands Funding, LLC – Series 2018-1 Senior Secured Notes

NEW YORK--()--Kroll Bond Rating Agency (KBRA) announces the preliminary ratings to a note class of Driven Brands Funding, LLC, a whole business securitization.

Driven Brands, Inc. (“Driven Brands” or the “Company”) completed its first whole business securitization in July 2015. The transaction structure is a master trust, and the Senior Secured Notes, Series 2018-1 represents the Company’s third securitization within the trust. Driven Brands Funding, LLC (the “Issuer”) is expected to issue $250 million of Class A-2 Notes (pari passu with the Series 2015-1 A-2 Notes and Series 2016-1 A-2 notes). In connection with the issuance, the company is pledging additional collateral related to its quick lube vertical.

Driven Brands is one of the largest franchisors in the aftermarket automobile services and parts distribution industries. The Company franchises, owns, operates and manages locations under the core brands of CARSTAR, Maaco, Meineke, 1-800-Radiator & A/C and Take 5 Oil Change. The transaction will also include franchises that operate under the Merlin, Pro Oil Change, Econo-Lube N’ Tune, Aero Colours, Drive N Style and AutoQual brand names. The collateral consists of all existing and future franchise agreements in the United States, royalties and profits from existing and future company-operated locations, product sourcing agreements, related intellectual property and a license fee from Canadian sub-franchises. The Company has a network of approximately 2,591 locations across 49 states and ten Canadian provinces.

KBRA analyzed the transaction using the Global General Rating Methodology for Asset-Backed Securities published on November 28, 2017. KBRA also conducted an on-site operational review of Driven Brands at its Charlotte, NC headquarters in March 2018. KBRA will review the final operative agreements and legal opinions for the transaction prior to closing.

For complete details on the analysis, please see KBRA’s Pre-Sale Report, “Driven Brands Funding, LLC, Series 2018-1”, which was published today at www.krollbondratings.com. The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.

Preliminary Ratings Assigned: Driven Brands Funding, LLC – Series 2018-1 Senior Secured Notes

Series 2018-1   Preliminary Rating   Initial Principal Balance
Class A-2   BBB (sf)   $250,000,000*
   

* The aggregate initial principal amount of the Series 2018-1 Class A-2 Notes may be increased to up to $275,000,000.

Representations & Warranties Disclosure

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report available here.

Related Publications: (available at www.kbra.com)

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Xilun Chen, Senior Director
(646) 731-2431
xchen@kbra.com
or
Andrew Lin, Director
(646) 731-2483
alin@kbra.com
or
Shi Shen, Senior Analyst
(646) 731-2480
sshen@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Xilun Chen, Senior Director
(646) 731-2431
xchen@kbra.com
or
Andrew Lin, Director
(646) 731-2483
alin@kbra.com
or
Shi Shen, Senior Analyst
(646) 731-2480
sshen@kbra.com