Dunkin' Brands
Dunkin' Brands' $1.7 billion deal securitized substantially all of the revenue-generating assets of the restaurant franchiser's brands throughout the world--including Dunkin' Donuts, Baskin-Robbins and Togo. This innovative form of securitization required Dunkin' Brands to contribute its existing assets to several bankruptcy-remote special-purpose vehicles and obligates Dunkin' Brands to contribute all future revenue generating assets to these various entities. The securitization, which closed May 26, consisted of the issuance of $1.5 billion of senior fixed-rate notes, $100 million of subordinated fixed-rate notes and a $100 million variable-funding senior notes revolving facility. The proceeds of the securitization will be used to repay debt incurred in connection with the leveraged buyout of Dunkin' Brands by a consortium of three private equity firms, The Carlyle Group, Bain Capital and Thomas H. Lee Partners, which collectively acquired Dunkin' Brands for $2.425 billion. Lehman Brothers acted as lead underwriter and sole structuring agent.
World Financial Network Master Note Trust, Series 2006-A
The $500 million, floating-rate WFN 2006-A used a unique structure to enable World Financial Network National Bank to refinance debt ahead of schedule and use an interest rate swap to lock in tight credit spreads and interest rates in a rising-rate environment. The structure allowed World Financial to refinance WFN 2004-B four months earlier than scheduled by matching the principal accumulation profile of the previous ABS and ensuring a smooth transition of financing between the two series. As part of this, the deal used a $450 million prefunding account, which was funded with cash proceeds until receivables from WFN 2004-B became available. WFN 2006-A also was structured to minimize negative carry on the prefunding account. The deal was the first term paired series ABS and also marked the first time that a paired series was rated AAA. Barclays Capital was the lead underwriter.
Foundation Capital Resources
The $137 million Foundation Capital Resources deal was the first securitization of multi-denominated church receivables. The portfolio backing the single-tranche deal included 177 loans on churches in 32 states, with an average loan size of just over $1 million. The AAA deal was priced at swaps plus 90 and underwritten by KeyBanc and BMO Capital Markets.
GCO Education Loan Funding Corp. 2006-2
The C$280 million GCO Education Loan Funding Corp. 2006-2 was the first ABS deal to securitize U.S.-based assets in Canada, issue notes denominated in Canadian dollars and use the one-month Canadian dollar offered rate as the rate index. The deal was part of a larger student loan securitization, the $1.5 billion GCO ELF Student Loan Asset-Backed Notes Series 2006-2 transaction. The collateral pool included reinsurance for 97% of the principal and accrued interest provided by the U.S. Department of Education.RBC Capital Markets Corp. was lead underwriter on the deal.
Citigroup $10 Billion Committed Funding Facility
In this transaction, Citigroup agreed to purchase up to $10 billion in securities collateralized by a variety of GMAC assets originated in the United States, including motor vehicle installment sales contracts, motor vehicle leases and balloon loans assets that were ineligible for private/public securitizations. The facility played a major role in the Cerberus Capital Management-led partnership's winning bid for GMAC. It was significant because it established structured finance as an essential financing technique in situations that are not traditionally linked to securitization finance, including M&A and private equity financings.