NEW YORK–(BUSINESS WIRE)
Kroll Bond Rating Agency (KBRA) announces the preliminary ratings to four note classes of Hardee’s Funding LLC and Carl’s Jr. Funding LLC, a whole business securitization.
This transaction represents the second whole business securitization (“WBS”) co-issued by Hardee’s Funding LLC and Carl’s Jr. Funding LLC (“Co-Issuers”). The proceeds from the offered notes will be used to refinance its existing 2013-1 securitization transaction and pay certain transaction expenses. If the transaction upsizes, additional proceeds may be used for general corporate purposes, which may include a distribution to shareholders. In connection with its first securitization transaction in 2013, CKE Restaurants Holdings, Inc. (“CKE”, or the “Company”) contributed substantially all of its revenue-generating assets to the Co-Issuers as collateral for the then offered notes.
CKE Restaurants Holdings, Inc. is the franchisor and operator of restaurants under the core brands of Carl’s Jr. and Hardee’s, as well as to a lesser degree, Red Burrito and Green Burrito. The collateral includes existing and future domestic and international franchise agreements, existing and future domestic company-operated restaurant royalties, existing and future profits from domestic company-operated restaurants, certain owned real estate, franchisee leases, and intellectual property.
KBRA analyzed the transaction using the Global General Rating Methodology for Asset-Backed Securities published on November 28, 2017. KBRA also conducted an on-site operational review of CKE at its Franklin, TN headquarters in April 2018. KBRA will review the final operative agreements and legal opinions for the transaction prior to closing.
For complete details on the analysis, please see KBRA’s pre-sale report, Hardee’s Funding LLC and Carl’s Jr. Funding LLC, Series 2018-1, which was published today at www.kbra.com.
The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.
Preliminary Ratings Assigned: Hardee’s Funding LLC and Carl’s Jr. Funding LLC, Series 2018-1 Senior Secured Notes
Series 2018-1 Preliminary Rating Initial Principal Balance Class A-1 BBB (sf) $70,000,000 Class A-2-I BBB (sf) $310,000,000* Class A-2-II BBB (sf) $310,000,000* Class A-2-III BBB (sf) $310,000,000*
* The aggregate initial principal amount of the Series 2018-1 Class A-2 Notes may be increased to up to $1,000 million.
Representations & Warranties Disclosure
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report available here.
Related Publications: (available at www.kbra.com)
Hardee’s Funding LLC and Carl’s Jr. Funding LLC, Series 2018-1 Pre-Sale Report Hardee’s Funding LLC and Carl’s Jr. Funding LLC, Series 2018-1 Pre-Sale ReportGlobal General Rating Methodology for Asset-Backed Securities
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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
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Kroll Bond Rating Agency
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