KBRA Assigns Preliminary Ratings to EWC Master Issuer LLC Series 2022-1 Senior Secured Notes
NEW YORK–(BUSINESS WIRE)–#KBRA–KBRA assigns preliminary ratings to two classes of notes from EWC Master Issuer LLC Series 2022-1, a whole business securitization.
The Series 2022-1 Class A-1 Notes and Series 2022-1 Class A-2 Notes (together, the Notes), anticipated to be issued by EWC Master Issuer LLC (the Master Issuer), represent European Wax Center, Inc.’s (EWC or the Company) first securitization. The transaction structure is structured as a “whole business securitization” (WBS) in which EWC and certain of its affiliates are contributing substantially all of their revenue-generating assets to the Master Issuer. The collateral includes existing and future franchise and area development agreements, supply contracts, profits from wholesale and retail product sales, royalties and other franchise fees, and intellectual property. The proceeds from the offered notes will be used to fully pay down all borrowings under the Company’s existing credit facility, fund certain transaction accounts, and pay certain expenses and general corporate purposes, which is expected to include a return of capital to shareholders.
The Company provides out-of-home (OOH) waxing services in the U.S. The OOH waxing market is the fastest growing segment within the broader hair removal market, which the Company estimates to be approximately $18 billion, domestically. The system delivered over 20 million waxing services across EWC’s 853 locations and generated approximately $797 million of system-wide sales for the twelve months ending (LTM) December 25, 2021 (Q4 2021). The network is 99% franchised by location count and is spread across 44 states and Washington D.C. as of the same date.
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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.
Contacts
Analytical Contacts
Xilun Chen, CFA, Managing Director (Lead Analyst)
+1 (646) 731-2431
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Matthew Gardener, Associate Director
+1 (646) 731-1276
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Edward Napoli, Director
+1 (646) 731-1284
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Rosemary Kelley, Senior Managing Director (Rating Committee Chair)
+1 (646) 731-2337
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Business Development Contact
Ted Burbage, Managing Director
+1 (646) 731-3325
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