Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three note classes of ServiceMaster Funding LLC, (the “Issuer”) a whole business securitization.
This transaction represents ServiceMaster’s first securitization. This transaction is structured as a “whole business securitization” in which ServiceMaster Opco Holdings LLC and certain of its affiliates will contribute substantially all of their revenue-generating assets to ServiceMaster Funding LLC and its subsidiaries and ServiceMaster of Canada Limited. The transaction collateral includes existing and future domestic and international franchise and regional distribution agreements, royalties and profits from company-operated locations, product and equipment sales, franchisee notes, other franchisee fees and intellectual property.
ServiceMaster Brands (“SMB”) is a leading provider of restoration and cleaning services to commercial and residential customers across all 50 states and 8 countries. SMB’s platform consists of its ServiceMaster Restore (restoration), ServiceMaster Clean (commercial cleaning), Merry Maids (residential cleaning), Furniture Medic (cabinet and furniture repair) and AmeriSpec (home inspection) businesses. SMB serves both residential and commercial customers in the US through a network of 2,119 North American locations and 1,922 franchisees as of September 30, 2020 (Q3 2020), with additional locations in 8 other countries. For the twelve months ending Q3 2020, the system generated system sales of approximately $2.6 billion. The system is approximately 99.7% franchised.
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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 U.S. Information Disclosure Form located here.
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Further disclosures relating to this rating action are available in the U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
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