KBRA Assigns Preliminary Ratings to Neighborly Issuer LLC Series 2023-1 Senior Secured Notes

KBRA assigns preliminary ratings to three note classes of Neighborly Issuer LLC Series 2023-1, (the “Issuer”) a whole business securitization.

Neighborly 2023-1 represents Neighborly Issuer LLC’s (Neighborly or the Company) third securitization from its master trust, of which approximately $1.3 billion is currently outstanding. The outstanding prior Series, Series 2021-1 and Series 2022-1, and Series 2023-1 share in the same collateral pool. The Issuer is expected to issue three classes of notes totaling up to $408 million (the Series 2023-1 Notes, and together with the Issuer’s Series 2021-1 Notes and Series 2022-1, the Notes). KBRA re-analyzed the prior Series in conjunction with the issuance of the Series 2023-1, and anticipates affirming all of the outstanding ratings on or shortly after the Series 2023-1 closing date.

Founded in 1981, Neighborly is one of the largest providers and franchisors of do-it-for-me (“DIFM”) household services in the United States. The transaction collateral includes existing and future domestic franchise agreements and development agreements, international and domestic license agreements, royalties on company-operated locations, third party vendor rebates and product margin, other franchise fees and intellectual property. The proceeds from the offered Notes will be used to fund various transaction accounts, pay certain transaction fees and expenses and for general corporate purposes, including for distributions to parent entities of Neighborly for the purposes of repaying indebtedness.

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Related Publications

• Whole Business Securitization ABS Global Rating Methodology
• 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 pursuant to the Temporary Registration Regime. 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.

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