KBRA Assigns Preliminary Ratings to EWC Master Issuer LLC Series 2022-1 Senior Secured Notes

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NEW YORK–(BUSINESS WIRE)–KBRA assigns preliminary ratings to two classes of EWC Master Issuer LLC Series 2022-1 Bonds, a full corporate securitization.

Series 2022-1 Class A-1 Notes and Series 2022-1 Class A-2 Notes (together, the Notes), expected to be issued by EWC Master Issuer LLC (the Principal Issuer), represent European Wax Center, Inc.’ s (EEC or the Company) first securitization. The structure of the transaction is structured as a “Whole Business Securitization” (WBS) in which EWC and certain of its affiliates contribute substantially all of their income-generating assets to the primary issuer. Coverage includes existing and future franchise and area development agreements, supply contracts, profits from wholesale and retail product sales, royalties and other franchise rights, and intellectual property. Proceeds from the Offered Notes will be used to repay in full all borrowings under the Company’s existing credit facility, fund certain transaction accounts and pay certain general corporate expenses and purposes, which is expected to include a return of capital. to shareholders.

The Company provides out-of-home (OOH) waxing services in the United States. The OOH waxing market is the fastest growing segment of the broader hair removal market, which the company estimates to be around $18 billion nationwide. The system provided more than 20 million waxing services across EWC’s 853 locations and generated approximately $797 million in systemwide sales for the twelve months ending (LTM) 25 December 2021 (Q4 2021). The network is 99% franchised by number of locations and is spread across 44 states and Washington DC as of the same date.

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Disclosures

Further information on key credit considerations, sensitivity analyzes which look at factors that may affect these credit ratings and how they could lead to an upgrade or downgrade, and ESG factors (where they are a driver key to the change in credit rating or rating outlook) can be found in the full rating report referenced 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 the main relevant rating assumptions, the where applicable) used to determine 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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