KBRA Assigns Preliminary Ratings to SEB Funding LLC, Series 2024-1
11 Mar 2024 | New York
KBRA assigns preliminary ratings to two classes of notes for SEB Funding LLC (the Issuer), Series 2024-1 (SEB 2024- 1), a whole business securitization. SEB 2024-1 represents the Issuer’s second securitization from its master trust. The Series 2021-1 transaction (the Existing Notes) and Series 2024-1 (together with the Existing Notes, the Notes) share in the same collateral pool. Furthermore, additional collateral is expected to be contributed by Orangetheory Fitness (OTF) following an expected merger of SEB and OTF (the Business Combination). On the Series 2024-1 closing date, the Series 2024-1 Class A-1- VFN Notes will be undrawn (and will not be drawable until the Business Combination is successfully closed) and the proceeds from the issuance of the Series 2024-1 Class A-2 Notes will be held in an escrow account. In the event the Business Combination does not successfully close within the specified time period, the Series 2024-1 Class A-1-VFN Notes will automatically terminate and the Class A-2 Note amounts held in escrow will be used to repay the Series 2024-1 Class A-2 noteholders in full.
KBRA re-analyzed the Existing Notes in conjunction with the issuance of the Series 2024-1. The ratings are being placed on Watch Upgrade. Should the Business Combination close as expected, KBRA expects that the ratings will be upgraded by one notch owing to additional cash flow and increased system scale from the integration of OTF.
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