Servpro, a specialist in business and residential property restoration and reconstruction after a disaster, is sponsoring its second whole-business securitization of revenue from fees, intellectual property and sources from its network of franchises.
According to Kroll Bond Rating Agency, Servpro will issue bonds via its master trust totaling $260 million for a potential shareholder distribution along with general corporate purposes and a prefunding account.
Servpro Master Issuer Series 2021-1 will feature a single Class A-2 tranche of notes, with preliminary BBB ratings from Kroll.
The collateral will include revenue from existing and future franchise and development agreements, product supply contracts, and other areas of cash flow from its estimated 1,860 independently owned and operated franchises, as of Dec. 31 of last year.
Servpro
Kroll noted that while the economic impact of the COVID-19 outbreak has slowed business demand for its core restoration and reconstruction services, “the pandemic has driven significant demand for the Company’s commercial cleaning and disinfecting services.”
Because of the demand for the latter services, the company’s systemwide revenue grew about 2% from the same period a year ago on $2.8 billion in sales. Servpro projects 2021 systemwide sales figures will increase by about 9% over 2020.
Securitization net cash flow has increased to about $116 million for 2020 versus $91 million for the 12 months prior to June 2019, prior to Servpro’s first securitization.
Barclays is the sole bookrunner and structuring advisor.
