In its second securitization of revenue from customer agreements on fiber-to-the-premises (FTTP) contracts, Kinetic ABS Issuer is preparing to sell $1.1 billion in bonds to investors.
The transaction will issue notes through three tranches, classes A2, B and C, according to Kroll Bond Rating Agency.
Analysts at Fitch Ratings say the notes have an anticipated repayment date of June 2033, and a rated final payment date of June 2058. The deal uses a master trust structure, which allows the transaction to issue additional notes if they meet certain conditions, including getting rating agency confirmation.
Barclays is managing the deal, which is slated to close on June 30, according to Asset Securitization Report's deal database. It is the sole structuring agent and lead bookrunner, KBRA said.
Fitch says its net cash flow on the combined pool is $215 million, suggesting a haircut of 13.0% to the net cash flow estimated by the issuer. The rating agency added that the deal's overall debt multiple relative to the Fitch net cash flow on classes A, B and C notes is 6.9x, 8.0x and 9.8x respectively.
Among the deal's positive credit characteristics was the pool's diversification by customer base and geography. The collateral pool includes more than 1.1 million passings across 10 states, with Georgia accounting for the largest percentage (31%). Texas and Kentucky follow, both with ratios of 16%.
Kinetic 2026-1 will repay investors through a capital structure that includes subordination, a rapid amortization provision, and a cash trap and cash sweep provisions. For instance, if the senior cash trap debt service coverage ratio is less than 1.75x or the leverage ratio exceeds the greater of 9.50x or the sum of the leverage ratio and closing, plus 1.00x, then half of available funds will be placed in the cash trap reserve account, KBRA said.
Fitch assigns A-, BBB- and BB- to classes A2, B and C, respectively. KBRA, meanwhile, assigns A-, BBB, and BB- to the classes A2, B and C, respectively.
