Transaction Update: RAC Bond Co. PLC

RAC Bond Co. PLC is a whole business securitization of RAC Bidco Ltd.'s (RAC) operating businesses. RAC Bond Co.'s financing structure blends a corporate securitization of RAC's operating business in the U.K. with a subordinated high-yield issuance. The transaction is backed by future cash flows generated by the operating businesses, which include roadside services and insurance&financial services, but exclude RAC Insurance Ltd. (RACIL) and RACMS (Ireland) Ltd. The transaction features two classes of notes (A and B), the proceeds of which have been on-lent by the issuer to the borrower, via issuer-borrower loans. The operating cash flows generated by the borrowing group are available to repay its borrowings from the issuer which, in turn, uses those proceeds to

...RAC Bond Co. PLC is a whole business securitization of RAC Bidco Ltd.'s (RAC) operating businesses. RAC Bond Co.'s financing structure blends a corporate securitization of RAC's operating business in the U.K. with a subordinated high-yield issuance. The transaction is backed by future cash flows generated by the operating businesses, which include roadside services and insurance & financial services, but exclude RAC Insurance Ltd. (RACIL) and RACMS (Ireland) Ltd. The transaction features two classes of notes (A and B), the proceeds of which have been on-lent by the issuer to the borrower, via issuer-borrower loans. The operating cash flows generated by the borrowing group are available to repay its borrowings from the issuer which, in turn, uses those proceeds to service the notes. The transaction will likely qualify for the appointment of an administrative receiver under the U.K. insolvency regime. An obligor default would allow the noteholders to gain substantial control over the charged...

Transaction Update Report