A whole business securitization (WBS) is a transaction in which an issuance of notes is secured by a pool of income-generating assets (other than “financial assets” like loans or receivables) that make up substantially all the revenues of a business. 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. 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. to a bankruptcy-remote, special purpose vehicle, which serve as collateral for the offered notes. 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. Collateral and Industries Ambac Assurance serves as credit enhancer in whole business securitization of Sonic Corporation. The likely extension of support of Libor until June 30, 2023 is a major plus for the securitization market, fending off potential market disruption the buying and trading of $1.8 trillion in outstanding asset-backed securities because of the planned cessation of the benchmark rate by the end of 2021. It is also becoming more familiar to regulators outside the United States. Fitch Ratings-Chicago-09 December 2019: The overall benefits of U.S. whole business securitization (WBS), or corporate securitization, are often overstated, according to Fitch Ratings. 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). Th e security attached to the loan is also transferred to the SPV. rather than backed by “assets” (accounts receivables, leases receivables, etc.). "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 … 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. 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. For reprint and licensing requests for this article. 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 … †Assessed based on "Stand-Alone Credit Profiles: One Component Of A Rating," published on Oct. 1, 2010. 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. Experience Our finance and securities practices are consistently ranked among the world’s best in each area, and have recently received practice-wide and individual lawyer recognition in Chambers USA, The Legal 500, and U.S. News. 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. Clients Ambac Assurance Corporation. 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. The global response to the virus has included mandatory business closures, reductions in maximum permitted occupancies, and encouraged social distancing. Whole business securitization: Business risk profile§ DSCR analysis† Anchor‡ *Assessed based on "Project Finance Operations Methodology," published on Sept. 16, 2014. (Sonic, founded in1953, is headquartered in Oklahoma City.). 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. Th is secured loan is then transferred to a bankruptcy-remote special purpose vehicle which issues the notes. The Consumer Financial Protection Bureau said that the Dallas-based auto lender knowingly supplied inaccurate consumer data to the three major credit reporting agencies. The Global Market for Asset -Backed Securities Prof. Ian Giddy Stern School of Business New York University Asset -Backed Securities The Series 2020-1 offering includes $400 million in A-2-I notes and $450 million in A-2-II notes, as well as a $25 million A-1 variable funding notes, according to presale reports. The final balances of the Class A-2-I and A-2-II notes tranches may change by the time the deal closes, and the deal could be upsized to as much as $925 million, according to S&P Global Ratings. 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. 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 company was acquired by Inspire Brands, the fourth-largest U.S. restaurant company by systemwide sales, in 2018. Announces Completion of $40 Million Whole Business Securitization Transaction Transaction Significantly Lowers Cost of Capital Business Wire LOS ANGELES -- March 9, 2020 FAT(Fresh. It has a hybrid nature which holds characteristics of both a secured corporate finance and an asset securitization. It has a hybrid nature which holds characteristics of both a secured corporate finance and an asset securitization. Whole-business securitization, or WBS, is a practice a company can use to issue bonds backed by many of its revenue streams. The deal, Sonic Capital LLC will issue $575 million of notes with a preliminary ‘BBB’ rating from Standard & Poor’s. Guggenheim Securities is the arranger. About 4,400 loans started the foreclosure process in November, alongside 176,000 mortgages in active foreclosure. 21 Jul 2011 By: A novel financing technique is enabling companies to access credit at far cheaper rates and far more attractive terms than they could obtain in the bank debt market. 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. Jones Day counseled Ambac Assurance Corporation in connection with the $800 million whole business securitization of franchise agreements and related royalties, intellectual property and other assets of Sonic Corporation, the largest chain of … The Consumer Financial Protection Bureau said that the Dallas-based auto lender knowingly supplied inaccurate consumer data to the three major credit reporting agencies. 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 company was accused of sending borrowers erroneous loan modification information between 2014 and 2018. The proposal would require the government-sponsored enterprises to craft resolution plans similar to regulations imposed on the largest U.S. banks. The deal, Sonic Capital LLC will issue $575 million of notes with a preliminary ‘BBB’ rating from Standard & Poor’s. Sonic has utilized whole-business securitization to finance operations since 2013, when it was independently owned. The company was acquired by Inspire Brands, the fourth-largest U.S. restaurant company by systemwide sales, in 2018. The securitisation of the royalty payments of franchises for acquisition of Dunkin' Brands deal was as close to a whole business securitization as is possible under US law. rather than backed by “assets” (accounts receivables, leases receivables, etc.). The likely extension of support of Libor until June 30, 2023 is a major plus for the securitization market, fending off potential market disruption the buying and trading of $1.8 trillion in outstanding asset-backed securities because of the planned cessation of the benchmark rate by the end of 2021. 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. Are expected to open under the current Standard license agreement regulations imposed on the largest chain of drive-in in., in 2018 Planet Fitness, Kroll added and 2018 Component of a Rating, published. 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