KBRA Assigns Preliminary Rating to Servpro Master Issuer, LLC Series 2021-1 Senior Secured Notes

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to a note class of Servpro Master Issuer, LLC Series 2021-1, a whole business securitization.

Servpro Industries, LLC completed its first securitization in October 2019. This transaction is structured as a “whole business securitization” in which Servpro Industries, LLC and certain of its affiliates have contributed substantially all of their revenue-generating assets to Servpro Master Issuer, LLC (the “Issuer”). The Issuer is expected to issue $260 million Series 2021-1 Class A-2 Notes. The transaction collateral includes existing and future franchise and development agreements, product supply contracts, call center payments, document restoration assets, vendor commissions, other franchisee fees and securitization information technology and intellectual property. The proceeds from the offered Notes will be used to fund certain transaction accounts including the pre-funding account and for general corporate purposes which may include a distribution to shareholders.

In conjunction with the issuance of the Series 2021-1 Notes, KBRA anticipates affirming the ratings on the Issuer’s outstanding Series 2019-1 Class A-1 Notes and Series 2019-1 Class A-2 Notes. The ratings are expected to be consistent with the results of our cash flow scenarios following the addition of the Series 2021-1 Notes.

SERVPRO is the largest provider of property cleaning and restoration in the United States, focused primarily on restoring properties affected by water, fire, mold and other damage. The Company’s network includes 1,860 independently owned and operated franchises as of December 31, 2020 and serves customers across 50 states, the District of Columbia, and Canada, as of December 2020. For the twelve months ending December 31, 2020, the system generated system sales of approximately $2.8 billion. The system is 100% 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.

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