KBRA Assigns Preliminary Ratings to Planet Fitness Master Issuer LLC, 2022-1 Senior Secured Notes

KBRA assigns preliminary ratings to three classes of notes from Planet Fitness Master Issuer LLC Series 2022-1, a whole business securitization.

Planet Fitness Holdings, LLC (“Planet Fitness” or the “Company”) completed its first whole business securitization (“WBS”) in August 2018. The transaction structure is a master trust and the Series 2022-1 Class A-1 Notes, Class A-2-I Notes, and Class A-2-II Notes (the “Series 2022-1 Notes”) represent the Company’s third securitization within the trust. Planet Fitness Master Issuer LLC (the “Master Issuer”) is expected to issue $975 million of Series 2022-1 Notes, which will share the collateral with the existing notes. The collateral includes existing and future domestic franchise and development agreements and certain vendor contracts, profits from domestic corporate-owned locations (including those related to Sunshine Fitness), profits from equipment sales, certain other commission and franchise payments, and domestic and Canadian intellectual property. The proceeds from the offered notes will be used to fully pay down the Series 2018-1 Class A-1 Notes and Class A-2-I Notes, fund certain accounts, pay certain transaction expenses, and to fund a portion of the Sunshine Fitness acquisition.

The Company is best known for providing a fitness experience in a non-intimidating environment where members of all fitness levels can exercise. The brand is also known for providing value to its customers with a standard membership of $10 per month, with a black card option of $22.99 a month. This value proposition is designed to target a broad population, including occasional gym users and the large portion of the population over age 14 who are not gym members.

In conjunction with the issuance of the Series 2022-1 Notes, KBRA anticipates affirming the ratings on the Master Issuer’s outstanding Series 2018-1 Class A-2-II Notes and Series 2019-1 Class A-2 Notes (the “Existing Notes”, and together with the Series 2022-1 Notes, the “Notes”) and withdrawing the ratings on the outstanding Series 2018-1 Class A-1 and Class A-2-I Notes, which will be repaid in full from proceeds of the Series 2022-1 issuance. The ratings are consistent with the results of our cash flow scenarios following the addition of the Series 2022-1 Notes.

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Related Publications

• Whole Business Securitization 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.

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