Authority Brands, a franchisor of “do-it-for-me” indoor and outdoor home services, will be refinancing debt through a debut $475 million franchise-fee securitization.
Authority Brands, the umbrella company for 10 home-service brands such as The Cleaning Authority and One Hour Heating and Air Conditioning, will assign its franchise revenue streams to a newly formed master trust (AB Issuer LLC) for the issuance of three note tranches – all with preliminary BBB- ratings from Kroll Bond Rating Agency.
The largest tranche is a $425 million Class A-2 tranche, which have an expected seven-year maturity, according to a presale report.
The transaction collateral will including all franchisee revenues, company-owned store royalties, vendor rebates and product sales margins, license agreement and intellectual property for over 1,700 active units in 45 states, Canada, Puerto Rico, Indonesia and Kenya. The company is 97% franchised, and provides services for cleaning, maintenance and repairs, HVAC, home care, restoration, pet services and pest control.
Authority Brands, which is owned by private-equity firm Apax Partners, generated $1.3 billion of system-wide sales in 2020, according to KBRA.
BofA Securities and Guggenheim are joint structuring agents and bookrunners on the deal.
