KBRA Assigns Preliminary Ratings to Service Experts Issuer 2024-1 LLC
May 17 2024 - 6:10PM
Business Wire
KBRA assigns preliminary ratings to two classes of notes issued
by Service Experts Issuer 2024-1 (“SE 2024-1”), a $268.577 million
consumer lease ABS transaction. The preliminary ratings reflect
initial credit enhancement level of 24.20% for the Class A notes,
and 18.90% and for the Class B notes. Credit enhancement consists
of overcollateralization, excess spread, a cash reserve account and
subordination (except for the Class B notes).
This transaction represents the second ABS securitization for
Advantage Experts Services LLC, d/b/a Service Experts, (“Advantage
Experts” or the “Company”) and is collateralized by a pool of
residential retail lease contracts and agreements used to finance
heating, ventilation and air conditioning (HVAC) units, water
treatment or similar equipment, water heating equipment and related
maintenance contracts. The Company issued its inaugural ABS
securitization, Service Experts Issuer 2021-1, in 2021.
Advantage Experts is a provider of HVAC and water heater
equipment and services to both residential and light commercial
customers across the U.S. and Canada. Prior to October 2022, the
Company originated contracts through its various subsidiaries and
affiliates, including Service Experts LLC. As part of a corporate
reorganization, Advantage Experts assumed all originations under
the Advantage Program in October 2022 and such contracts have since
been originated by Advantage Experts. Advantage Experts is a
holding company where management, underwriting and servicing
personnel are employed under the Service Experts subsidiary.
KBRA applied its General Global Rating Methodology for Asset
Backed Securities, as well as its Global Structured Finance
Counterparty Methodology and ESG Global Rating Methodology as part
of its analysis of the portfolio pool data, underlying collateral
pool and capital structure. KBRA also conducted an operational
assessment of Advantage Experts, as well as a review of the
transaction’s legal structure and transaction documents. Operative
agreements and legal opinions will be reviewed prior to
closing.
To access rating and relevant documents, click here.
Click here to view the report.
Methodologies
- ABS: General Global Rating Methodology for Asset Backed
Securities
- Structured Finance: 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. 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.
Doc ID: 1004385
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Analytical
Rahel Avigdor, Managing Director (Lead Analyst) +1 646-731-1203
rahel.avigdor@kbra.com
Jacob Paulose, Associate Director +1 646-731-1269
jacob.paulose@kbra.com
Hollie Reddington, Senior Director (Rating Committee Chair) +1
646-731-3375 hollie.reddington@kbra.com
Business Development
Arielle Smelkinson, Senior Director +1 646-731-2369
arielle.smelkinson@kbra.com