HomeServe USA is preparing to manage a $2 billion securitization of revenue from home repair plans and service contracts.
The HS Issuer, series 1,2,3 is HomeServe's inaugural securitization, according to Kroll Bond Rating Agency, and the master issuer will issue the notes through five A1 and A2 tranches. The series 2026-1, A-1-V and 2026-1, A-2, issued from a master trust, have an anticipated repayment date of September 2031.
HS Issuer's legal final maturity date is September 2061 on all five notes, also with preliminary ratings of BBB notes. Jeferies & MUFG Securities Americas are both in the deal as structuring advisors, KBRA said.
HomeServe North America sells and administers home repair plans or service contracts, water loss related insurance products and on-demand home repair and installation services and related activities, according to the rating agency.
As of June 30, 2026, HomeService had managed more than 9.9 million contracts covering about 4.6 million customers in 48 states, the District of Columbia and the three Canadian provinces, KBRA said. By the cutoff date, the contracts generated about $819.4 million in adjusted net revenue for the twelve months that ended in June 2026.
Among the deal's capital structure, the class A2 notes have a scheduled amortization of 1.0% per annum when the class A leverage ratio exceeds 5.50x, as long as there is no rapid amortization period or post-ARD period is in effect, KBRA said.
The deal include cash trap and cash sweep conditions that call for 50% of available funds to be diverted to the cash trap account, if the senior debt service coverage ratio (DSCR) is less than 1.75x, or greater than or equal to 1.50x, KBRA said.
If the cash trap condition persists for longer than six straight months, the cash trapping percentage will remain at 100% during that period, according to KBRA.
When the deal closes, it will include about $36.6 million in required liquidity support. This can take the form of cash in the liquidity reserve account or liquidity reserve letters of credit issued from a portion of the class A-1-V, KBRA said.
