KBRA Assigns Preliminary Ratings to Wingstop Funding LLC Series 2022-1 Senior Secured Notes
NEW YORK–(BUSINESS WIRE)–#KBRA–KBRA assigns preliminary ratings to two classes of notes from Wingstop Funding LLC Series 2022-1, a whole business securitization.
Wingstop Restaurants Inc. (Wingstop, WRI, or the Company) and certain of its affiliates completed its first whole business securitization (WBS) in 2018, which was refinanced in 2020. The transaction structure is a master trust and the Series 2022-1 Class A-1 Notes and Class A-2 Notes (the Series 2022-1 Notes) represent the Company’s second securitization within the trust. Wingstop Funding LLC (the Issuer) is expected to issue $450 million of Series 2022-1 Notes, which will share the collateral with the Existing Notes (as defined below). The collateral includes existing and future franchise and development agreements, existing and future company-operated restaurant royalties, and certain vendor rebate contracts and intellectual property (IP). The proceeds from the offered notes will be used to pay transaction expenses, fund certain accounts and for general corporate purposes, which may include a dividend to shareholders. In connection with the issuance of the Series 2022-1 Notes, the Issuer intends to payoff and terminate the Series 2020 1 Class A 1 commitment issued pursuant to the Series 2020-1 Class A-1 note purchase agreement.
As of December 25, 2021 (Q4 2021), the Wingstop restaurant system included 1,731 restaurants with annual system-wide sales (SWS) of approximately $2.3 billion. The transaction includes royalty payments from 1,695 franchise locations and 36 company-operated restaurants, representing approximately 98% and 2% of total system-wide locations, respectively. The restaurant locations are located within the U.S. across 44 states and in six foreign countries. The major transaction parties are listed below.
In conjunction with the issuance of the Series 2022-1 Notes, KBRA anticipates affirming the rating on the Issuer’s outstanding Series 2020-1 Class A-2 Notes (the Existing Notes, and together with the Series 2022-1 Notes, the Notes) and withdrawing the rating on the Issuer’s Series 2020-1 Class A-1 Notes. The ratings are consistent with the results of our cash flow scenarios following the addition of the Series 2022-1 Notes.
Click here to view the report. To access ratings and relevant documents, click here.
Related Publications
- Whole Business Securitization ABS Global Rating Methodology
- Global Structured Finance Counterparty Methodology
- ESG Global Rating Methodology
Disclosures
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.
Contacts
Analytical Contacts
Xilun Chen, CFA, Senior Director (Lead Analyst)
+1 (646) 731-2431
xilun.chen@kbra.com
Matthew Gardener, Associate Director
+1 (646) 731-1276
matthew.gardener@kbra.com
Edward Napoli, Director
+1 (646) 731-1284
edward.napoli@kbra.com
Rosemary Kelley, Senior Managing Director (Rating Committee Chair)
+1 (646) 731-2337
rosemary.kelley@kbra.com
Business Development Contact
Ted Burbage, Managing Director
+1 (646) 731-3325
ted.burbage@kbra.com