Barclays Capital is currently marketing the first whole business securitization since the financial crisis.
Moody's Investors Service, which just issued a presale report on the transaction, has assigned its provisional ratings to the $245 million deal called Cajun Global Series 2011-1. Cajun Operating Co., a wholly owned subsidary of Church's Holding Corp., will be the manager of the assets.
The deal comprises a $25 million Class A tranche and a $220 million Class A-2 portion. The notes have an anticipated repayment date in February 2018 and a legal final maturity date in February 2041.
Moody's said that the Church's Chicken restaurant system compete in the same category as Kentucky Fried Chicken and Popeye's with differences in the focus on value. The chain has a
presence in 29 U.S. states, although with a major regional presence in Texas and 23 countries internationally. The entire system has 270 company-owned and U.S. operated locations and 1,446 franchised locations of which 980 are domestic and 466 international, the rating agency reported.
The notes are backed by basically all of the tangible and intangible assets comprising the domestic and international owned and franchised Church's Chicken and Texas Chicken businesses.
The ratings on the notes are primarily based on several factors, Moody's said. These are the strength of the Church's Chicken brand in the U.S. and the Americas and the Texas Chicken brand in most of its markets outside the country. The rating firm also cited the sizing of the notes issuance.
Aside from these, Moody's also considered the deal's structural features such as the partial amortization of the Class A-2 notes, among other things.
It also looked at the operational capabilities, track record and expertise of the Cajun management team as well as the PNC Bank-owned Midland Loan Services' role as the servicer to monitor the deal, to perform other duties including making servicing advances and to facilitate
the efficient manager replacement in the event of a manager termination event.
The rating agency also noted that the transaction structure is designed to ringfence certain cashflows in the structure and to isolate the assets' operating risks from Cajun's bankruptcy risk.
Moody's also took into acount FTI Consulting's role as the backup manager overseeing the transaction performance and facilitating manager replacement with the servicer's assistance and oversight.
In other deal news, yesterday DBRS issued a presale report on KeyCorp Real Estate Capital Markets' 144A deal called Waterfall Victoria Mortgage Trust Series 2011-SBC2. The $97.7 million CMBS is backed by 175 fixed and floating-rate seasoned loans secured by 175 multifamily, mixed-use and commercial properties. Citigroup Global Markets and Bank of America Merrill Lynch are managers on the transaction.
This deal adds to the already busy CMBS pipeline after Morgan Stanley and BofA came to market with Morgan Stanley Capital I Trust 2011-C1 as well as Deutsche Bank's and UBS' $2.2 billion CMBS transaction.
Meanwhile, pricings in the market include Ally Bank's auto deal and Fannie Mae's multifamily DUS mega securities amounting to $450 million.
Ally sold an upsized $1.3 billion (from $1.06 billion) auto-backed ABS, according to a Bloomberg report. The biggest, top-rated tranche worth $398 million that matures in 1.15 years priced at 29 basis points over the benchmark interest rate, the report said. Citigroup Global Markets, Barclays and Royal Bank of Scotland managed the offering.
The GSE also priced three separate multifamily mega securities totaling $450 million under its Fannie Mae Guaranteed Multifamily Structures or Fannie Mae GeMS program.