KBRA Assigns Preliminary Ratings to SEB Funding LLC, Series 2021-1 Notes

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes from SEB Funding LLC, a whole business securitization.

This transaction represents Self Esteem Brands LLC’s (“Self Esteem Brands”, “SEB” or the “Company”) first securitization. The transaction is structured as a “whole business securitization” (WBS) in which SEB and certain of its subsidiaries are contributing substantially all of their revenue-generating assets to SEB Funding LLC (the “Issuer”) and its subsidiaries. The Issuer is issuing three classes of notes totaling $510.75 million (the “Notes”). The transaction collateral includes existing and future franchise agreements and associated royalties and fees, rebate revenue, distribution sales margin, other fees and income and intellectual property. The proceeds from the offered Notes will be used to repay existing indebtedness, to pay certain transaction fees and expenses, and for general corporate purposes, including a distribution to the parent of the Company.

The Company is the franchisor and operator of health and wellness brands, including Anytime Fitness (fitness clubs), Waxing the City (waxing studios), Basecamp Fitness (high intensity studio fitness), and The Bar Method brands (low impact studio fitness). It is best known for its Anytime Fitness chain of facilities, which was founded in 2002. The SEB system includes 5,153 units across 50 states and 34 countries as of September 30, 2021. System-wide sales totaled approximately $1.7 billion for the twelve months ending September 30, 2021 (“LTM Q3 2021”) and the system is approximately 99% franchised.

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Related Publications

• Whole Business Securitization (WBS) ABS Global Rating Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

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.