KBRA Assigns Preliminary Ratings to Primrose Funding, LLC Series 2022-1 Senior Secured Notes


NEW YORK–(BUSINESS WIRE)–KBRA assigns preliminary ratings to two classes of Primrose Funding, LLC Series 2022-1 notes, a full corporate securitization.

Primrose 2022-1 represents the second securitization issued by Primrose Funding, LLC, following the issuance of series 2019-1 (Primrose 2019-1) on August 21, 2019. The current securitization shares the same collateral pool. In conjunction with the issuance of Primrose 2022-1, KBRA plans to confirm the ratings of the Issuer’s outstanding Series 2019-1 Class A-2 Notes (the Existing Notes and, together with the Series 2022-1 Notes, Notes) and to withdraw the Issuer’s Series 2019-1 Class A-1 Notes, which are currently undrawn and will be replaced by Series 2022-1 Class A-1 Notes. The ratings are consistent with the results of our cash flow analysis following the addition of the Series 2022-1 Notes.

As part of its inaugural securitization in 2019, Primrose School Franchising Company LLC (Primrose or the Company) pledged substantially all of its revenue-generating assets to the Issuer as collateral for the Notes then tendered. The Issuer is issuing two classes of Notes totaling $145 million (the Series 2022-1 Notes). Coverage includes existing and future domestic franchise and development agreements, educational programs and other franchise fees, and securitization intellectual property. Proceeds from the Offered Notes will be used to pay certain transaction fees and expenses, and for general corporate purposes.

The Primrose Franchise Network is one of the leading providers of premium early learning and child care in the United States. The Primrose franchise network offers a variety of programs, including arts, math, language and literacy, and social-emotional development, to customers through its system of 469 schools in 33 states, as of March 31, 2022. For for the twelve months ending (LTM) March 31, 2022, the system generated system-wide sales (“SWS”) of approximately $1.0 billion. The system is 100% franchised with over 300 franchisees, each owning an average of approximately 1.5 schools as of March 31, 2022.

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Further information on key credit considerations, sensitivity analyzes that consider factors that may affect these credit ratings and how they could lead to an upgrade or downgrade, and ESG factors (where they are a key factor in changing the credit rating or rating outlook) can be viewed in the full rating report mentioned above.

A description of all substantially significant sources that were used to prepare the credit rating and information on the methodology(ies) (including all significant models and sensitivity analyzes of key relevant rating assumptions, if any) used to determine the credit rating are available. in the information disclosure form(s) located here.

Information on the meaning of each rating category can be found here.

Additional information relating to this rating metric is available in the information disclosure form(s) referenced above. Additional information regarding KBRA’s policies, methodologies, grading scales and disclosures is available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a rating agency with the UK Financial Conduct Authority under the temporary registration scheme. In addition, KBRA is designated as the Designated Rating Agency 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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