KBRA Assigns Preliminary Ratings to Neighborly Issuer LLC Series 2021-1 Senior Secured Notes

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three note classes of Neighborly Issuer LLC Series 2021-1, (the “Issuer”) a whole business securitization.

This transaction represents the Company’s first securitization. The transaction is structured as a “whole business securitization” in which the Neighborly Company (“Neighborly” or the “Company”) and certain of its affiliates will contribute substantially all of their domestic revenue-generating assets to Neighborly Issuer LLC (the “Issuer”) and its subsidiaries. The Issuer is expected to issue three class of notes totaling $840 million (the “Notes”). The transaction collateral includes existing and future domestic franchise agreements, royalties from company-operated locations, vendor fees and product margin, license agreements, other franchise fees and intellectual property.

Neighborly is one of the largest providers and franchisors of do-it-for-me (“DIFM”) household services in the United States, focusing on repair, maintenance, and enhancement of customer homes. Neighborly’s platform consists of five segments encompassing 24 brands, which include outdoor, cleaning, episodic, maintenance/enhancement, and European. The Company primarily serves residential customers via approximately 3,400 active territories across all 50 states, the District of Columbia, and nine total countries including the US. For the twelve months ending October 2020, the system generated system sales of approximately $2.2 billion and is approximately 99% franchised.

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Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.


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