sonic whole business securitization

The notes will be collateralized from the fee agreements and revenues generated by 3,583 Sonic restaurants, with annual system-wide sale of about $4.6 billion. The Sonic Capital LLC Series 2020-1 deal’s total leverage is approximately 6.6x debt capacity to securitized net cash flow, which Kroll stated is higher than other WBS deals in the restaurant sector – comparable deals by Jack in the Box, Hardee’s/Carl’s Jr. and Wingstop produced debt levels between 5.5x and 5.9x. The sponsor was last in the market in 2013 when it issued $155 million in a private transaction; that deal refinance part of the $600 million that it originally issued in 2011. Sonic Corp., the drive-in restaurant chain operator, issued $155 million of notes backed by franchising revenue. The Issuer is expected to issue $40 million of Series 2020-1, Class A-1 Notes (the "Class A-1 Notes") and $415 million Series 2020-1, Class A-2 Notes (the "Class … Sonic Industries is returning to the securitization market with seven-year bonds backed by current and future franchise fees, restaurant royalties and other intellectual property. For reprint and licensing requests for this article. The locations are open throughout the day and have a diverse menu that includes hamburgers, hot dogs, breakfast items, frozen desserts, and beverages, all of which can be customized. About 4,400 loans started the foreclosure process in November, alongside 176,000 mortgages in active foreclosure. He makes an argument on two fronts: First, that these deals are coming to the fore … §Assessed based on "Corporate Methodology," published on Nov. 19, 2013. Announces Completion of $40 Million Whole Business Securitization Transaction Transaction Significantly Lowers Cost of Capital Business Wire LOS ANGELES -- March 9, 2020 FAT(Fresh. The global response to the virus has included mandatory business closures, reductions in maximum permitted occupancies, and encouraged social distancing. It is the largest whole-business securitization since the credit crisis – and more than $1 billion larger than the Sonic Drive-In transaction last year. The Consumer Financial Protection Bureau said that the Dallas-based auto lender knowingly supplied inaccurate consumer data to the three major credit reporting agencies. Th e security attached to the loan is also transferred to the SPV. Sonic Drive-In, a nationwide chain of restaurants noted for its signature bellhop attendants, is marketing a fifth issuance of notes backed by franchise-fee revenues through its whole-business securitization master trust. Sonic Corp. (Nasdaq: SONC) is marketing $170 million in bonds backed by royalties and franchise fees that will be issued through its whole-business securitization master trust. The company was accused of sending borrowers erroneous loan modification information between 2014 and 2018. The underlying assets are the summation of the Status of originator. The company was acquired by Inspire Brands, the fourth-largest U.S. restaurant company by systemwide sales, in 2018. The underlying assets are the summation of the Securitization is considered to be “good for business” by compelling an issuer to be more disciplined in how it operates its businesses thereby improving systems, documentation and the issuer’s understanding of the real cost of its portfolio. Sonic operates and franchises the largest chain of drive-in restaurants in the U.S. with over 3,500 locations across 45 states. Collateral and Industries The Consumer Financial Protection Bureau said that the Dallas-based auto lender knowingly supplied inaccurate consumer data to the three major credit reporting agencies. Sonic Industries is returning to the securitization market with seven-year bonds backed by current and future franchise fees, restaurant royalties and other intellectual property. Cumulative gross issuance of whole-business securitizations reached about $35 billion at the end of 2018, compared with about $13 billion just four years earlier, according to S&P. For reprint and licensing requests for this article. Sonic, headquartered in Oklahoma City, differentiates itself from its competitors by using a drive-in format where customers remain in their cars and the food is delivered to them. (Sonic, founded in1953, is headquartered in Oklahoma City.). The deal, Sonic Capital LLC will issue $575 million of notes with a preliminary ‘BBB’ rating from Standard & Poor’s. The chain has 3,385 franchised locations and 198 company-operated sites in 46 states, according to presale reports. Th is secured loan is then transferred to a bankruptcy-remote special purpose vehicle which issues the notes. The deal, Sonic Capital LLC will issue $575 million of notes with a preliminary ‘BBB’ rating from Standard & Poor’s. Each franchised Sonic drive-in operates under a franchise agreement that requires payments to Sonic of an initial franchise fee and a royalty fee based on a graduated percentage of gross revenues. Its whole-business securitization from 2019, rated triple-B by S&P Global Ratings, traded at more than 100 cents on the dollar on March 11, then tumbled to about 77 cents in April, Trace data show. The $875 million Series 2020-1 Issuance from Sonic Capital LLC will raise funds to refinance outstanding notes from its 2013 and 2016 notes series, as well as repay debt with Sonic’s parent company, Mavericks Inc., formerly known as Inspire Brands. Whole business securitizations, or the securitization of the entire future cash flows generated by the operations of a company--as opposed to just one existing asset class-- will be the next trend in asset-backed finance, says Michael Kanef, a managing director in the structured finance group at Moody's Investors Service. "If you look across the fixed-income market with rates low and spreads in more traditional consumer ABS tightening, as well as spreads snug in investment grade and other liquid asset classes, it is understandable that investors are looking to non-traditional ABS," says … Barclays Capital is the sole structuring adviser and joint book-running manager alongside Bank of America Merrill Lynch, Credit Suisse, Morgan Stanley and Wells Fargo. Sonic has utilized whole-business securitization to finance operations since 2013, when it was independently owned. Guggenheim Securities is the arranger. The Sonic system has been in operation for over 60 years and features 1950s-style décor. Dine Brands, parent company of Applebee’s and IHOP, priced a $1.72bn whole business deal that will pay off outstanding ABS notes. PACE sponsors are raising capital and promoting plans to retroactively fund stalled CRE projects amid the COVID-19 outbreak – a potential boost for what has been a shrinking assets class in ABS, Waters, Brown urge Mnuchin to halt housing finance reforms, FHFA proposes living wills for Fannie and Freddie, 2021 Outlook: What lies ahead for Libor transition, CFPB fines Santander Consumer $4.7M for fair-lending violations, CFPB orders Discover to pay $35 million for student lending mishaps, Foreclosures drop to new all-time low in November, Provident's next RMBS noted for 'unique' strong buyer pool, Seterus agrees to pay $5M in distressed servicing settlement with CFPB, Toomey’s compromise on Fed authority cleared way for stimulus deal. This transaction represents a refinancing of Sonic's current outstanding whole business/franchisee fee securitization issued in 2006. The consumer bureau said the bank’s migration to a new servicing platform led to unauthorized payment withdrawals, misrepresentations about what borrowers owed and violations of a prior 2015 enforcement action. Moody's assigns definitive rating to Sonic Capital whole business/franchise fee securitization 19 Jul 2013 $155 million of securities rated New York, July 19, 2013 -- Moody's Investors Service has assigned a definitive rating of Baa2 (sf) to the Series 2013-1 Class A-2 Senior Secured Notes (the Notes). Whole-business securitization, or WBS, is a practice a company can use to issue bonds backed by many of its revenue streams. ... As such, whole business securitization is used in a significant number of restaurant franchises such as Sonic, Domino’s, Wendy’s and Taco Bell as well as fitness … Whole Business Securitization (“WBS”) In a WBS deal, the sponsoring entity pledges the revenue-generating assets arising from its intellectual property (franchise fees, royalties, etc.) Mavericks Inc. itself is majority owned by Roark Capital, which has extensive experience in franchise-fee securitization with its other affiliates such as Primrose, Driven Brands, CKR Restaurants, Massage Envy and Focus Brands. Domino’s Pizza is preparing to sell an $800m whole business securitization backed by royalty cash flows and franchise agreements of the company’s more than 10,000 store locations. December 2006. S&P Global Ratings expects the COVID-19 pandemic to result in a material negative sales impact for many U.S. whole business securitization (WBS) issuers. In addition, funds from the note sale will also repay various note classes of similar whole-business backed bonds that were sold by Arby’s Funding, LLC (another Mavericks subsidiary). Clients Ambac Assurance Corporation. In order to rate a whole business securitization, rating agencies have adopted an approach that combines elements of a structured or securitization transaction and a corporate transaction. The company was accused of sending borrowers erroneous loan modification information between 2014 and 2018. The company was acquired by Inspire Brands, the fourth-largest U.S. restaurant company by systemwide sales, in 2018. The top Democrats on the House and Senate banking committees urged the Trump administration to pull the plug on any steps to overhaul Fannie Mae and Freddie Mac with the pandemic still taking a toll on the economy. DB Master Finance LLC's series 2019-1 is a $1.15 billion corporate securitization of the Dunkin' Brands business comprising $1.0 billion in offered notes in addition to $150 million in variable-funding notes (VFNs), which are not offered. In these transactions, which now Sonic has utilized whole-business securitization to finance operations since 2013, when it was independently owned. rather than backed by “assets” (accounts receivables, leases receivables, etc.). Approximately 89% of the store locations are franchised, with the remaining 11% company-owned. However, over 40% of those stores are concentrated in three states: Texas, Tennessee and Oklahoma. In a standard ‘whole-business securitization’ transaction, a fi nancial institution grants the sponsor a loan secured by a pledge on a specifi c set of assets. For the first time in three years, the company had positive year-over-year same-store sales after conducting refranchising efforts in 2017 and 2018. From debt issuance, management has ... Sonic 2018-1 BBB (sf) 3,587 1.3 94 0 Over 30 years QSR 4.8 2.0 2.5 Wendy's 2017-1 BBB (sf) 6,551 1.5 95 7 Over 30 years QSR 7.5 1.6 … … A whole business securitization is a finance method backed by cash flows generated from “business” itself (or sometimes including cash flows generated from asset sale, etc.) †Assessed based on "Stand-Alone Credit Profiles: One Component Of A Rating," published on Oct. 1, 2010. It has a hybrid nature which holds characteristics of both a secured corporate finance and an asset securitization. It is also becoming more familiar to regulators outside the United States. Apart from Dunkin’ Brands $1.7 billion franchise royalty securitization in 2006, $1.8 billion Sears Holdings transaction in 2007, and deals from Applebee’s and IHOP in 2007 were also one of the biggest intellectual property securitizations. Imposed on the largest chain of drive-in restaurants in the U.S. with over locations... 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