KBRA Assigns Preliminary Ratings to Service Experts Issuer 2024-1 LLC
17 May 2024 | New York
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.
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