KBRA Assigns Preliminary Ratings to AB Issuer LLC Series 2021-1 Senior Secured Notes

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two note classes and an advance funding facility of AB Issuer LLC Series 2021-1, a whole business securitization.

The transaction is structured as a “whole business securitization” in which Villa BidCo Inc. (d/b/a “Authority Brands”, “AB” or the “Company”) and certain of its affiliates are contributing substantially all of their domestic revenue-generating assets to AB Issuer LLC (the “Issuer”) and its subsidiaries. This transaction represents the Company’s first securitization. The Issuer is issuing two classes of notes totaling $475 million (the “Notes”) and entering into an advance funding facility with a maximum commitment of $5 million. The transaction collateral includes existing and future domestic franchise agreements, domestic royalties from company-operated locations, vendor rebates and product sales margin, license agreements, other franchise fees and intellectual property.

Founded in 1977 with The Cleaning Authority as its original brand, Authority Brands is the owner of 10 home service brands that operate mainly in the U.S. offering various solutions for homeowners on service needs within the home. AB’s home service segments include indoor and outdoor recurring services along with maintenance/emergency services. The Company primarily serves residential customers via over 1,700 active units across 45 states, Canada, Puerto Rico, Indonesia and Kenya. For the twelve months ending December 2020, the Company generated system-wide sales of $1.3 billion and is approximately 97% franchised.

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.