NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns a preliminary rating of BBB (sf) to Coinstar Funding, LLC Series 2018-1 Fixed Rate Senior Secured Notes, Class A-2, a whole business securitization.
Coinstar, LLC (“Coinstar” or the “Company”) completed its first “whole business securitization” in May 2017. The company has contributed most of its revenue-generating assets to Coinstar Funding LLC as collateral for the offered notes. The transaction is structured as a master trust. The Series 2018-1, Class A-2 Notes represent Coinstar’s second securitization and shares the collateral with the Series 2017-1, Class A-1 Notes and Series 2017-1, Class A-2 Notes. The collateral includes existing and future Coinstar branded kiosks in the United States, existing and future agreements with retail and product partners in the United States, and intellectual property. The proceeds from the offered notes are being used to pay certain transaction expenses and for general corporate purposes, including a return of capital to the transaction sponsor.
Coinstar operates a multi-national network of fully automated self-service coin counting machines. Consumers interact with Coinstar’s coin counting kiosks by feeding loose change into a kiosk, which dispenses a voucher, which consumers can redeem for cash at a retail location where the kiosks are located. The Company generates revenue through a transaction fee charged to consumers, or product partners, depending on if a voucher or gift card option is selected. As of March 2018, Coinstar’s network consisted of approximately 19,900 kiosk locations with annual system-wide sales of approximately $344.5 million for the twelve month period ending March 31, 2018. Approximately 85.1% of the kiosks are located in the United States and the remainder are located internationally.
KBRA will be affirming the ratings on the issuer’s outstanding Series 2017-1 Notes at transaction close. The affirmation will reflect both the collateral performance, which is expected to be in line with the respective KBRA rating scenarios and the expectation that the classes will continue to pass their respective rating level stresses with the addition of the 2018-1 Notes.
KBRA analyzed the transaction using the Global General Rating Methodology for Asset-Backed Securities published on November 28, 2017. 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 Coinstar Funding LLC – Series 2018-1 Senior Secured Notes published at www.kbra.com.
The preliminary rating is 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 rating that differ from the preliminary rating.
Preliminary Rating Assigned:
Coinstar Funding, LLC – Series 2018-1 Fixed Rate Senior Secured Notes
|Series 2018-1||Rating||Initial Principal Balance|
|Class A-2||BBB (sf)||$100,000,000|
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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