In its third master trust securitization, Jimmy John’s Funding is preparing to sell $585 million in bonds to investors.
While those notes hit the market, the series 2017-1, Class A-2-II; 0222-1, class A-1; and series 2022-1, class A-2-I notes will be repaid, and Kroll Bond Rating Agency expects to withdraw their ratings, analysts at the firm noted in a presale report.
Also, analysts expect to affirm the ratings on series 2022-1, class A-2-II and series 2022-1, class A-2-III, according to the rating agency.
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The fast casual restaurant operator, which focuses on sandwiches and wraps, has 2,776 locations in 44 states and Washington, D.C., whose revenues are securitized, KBRA said. Franchise royalties and commissions account for virtually all, or 96.2%, of the collections that will support the notes
Barclays Capital is the lead structuring advisor and lead book-running manager on the deal, which has a July 2026 closing date, according to analysts at S&P Global Ratings.
The A1 and A2 notes have anticipated repayment dates of July 30, 2031 and Oct. 30, 2031, respectively, while both tranches have a legal final maturity date of April 30, 2056, S&P said.
The transaction structure includes an interest reserve account on the senior notes, tranche 2026-A1 VFN, according to KBRA. Notes in the A2 tranche will have a schedule amortization of 1.0% annually before the anticipated repayment date (ARD), unless the senior ABS leverage ratio is less than 5.5x and no rapid amortization event has been triggered and is ongoing.
The rapid amortization event will occur if the principal and interest debt service coverage ratio falls below 1.20x, KBRA said.
Both KBRA and S&P assign BBB to all the notes from the lates issuance.