NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Service Experts Issuer 2021-1 (“SE 2021-1”), a $337.4 million consumer lease ABS transaction. The preliminary ratings reflect initial credit enhancement level of 23.80% for the Class A notes, 18.47% for the Class B notes and 11.92% for the Class C notes. Credit enhancement consists of overcollateralization, excess spread, a cash reserve account and subordination (except for the Class C notes).

This transaction represents the inaugural ABS securitization for Service Experts LLC (“Service Experts”) 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.

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 considered its operational review of Service Experts. Operative agreements and legal opinions will be reviewed prior to closing.

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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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Rahel Avigdor, Senior Director (Lead Analyst)

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Alex Luthringer, Senior Analyst

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Eric Neglia, Senior Managing Director (Rating Committee Chair)

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