KBRA assigns preliminary ratings to three classes of notes from Jack in the Box Funding, LLC Series 2022-1, a whole business securitization.

Jack in the Box Inc. (“Jack in the Box”, "JIB", or the “Company”) and certain of its affiliates completed its first whole business securitization (WBS) in July 2019. The transaction structure is a master trust and the Series 2022-1 Class A-1 Notes, Class A-2-I Notes and Class A-2-II Notes (the “Series 2022-1 Notes”) represent the Company’s second securitization within the trust. Jack in the Box Funding, LLC (the “Master Issuer”) is expected to issue $1.25 billion of Series 2022-1 Notes, which will share the collateral with the Existing Notes (as defined below). The collateral includes existing and future franchise and license agreements, existing and future company-operated restaurant royalties and profits, certain owned real estate, real estate income, and intellectual property. The proceeds from the offered notes will be used to refinance the outstanding Series 2019-1 Class A-1 Senior VFN and Class A-2-I notes, certain transaction-related expenses, general corporate purposes, and for use in connection with the acquisition of Del Taco Restaurants.

The Company is the current franchisor and operator of restaurants under the Jack in the Box brand. As of October 3, 2021, the JIB restaurant system included 2,218 locations with annual system-wide sales of approximately $4.2 billion. The transaction includes royalty payments from 2,055 franchise locations and 163 company-operated restaurants, representing approximately 93% and 7% of total system-wide locations, respectively. All of the restaurant locations were located within the U.S. and one U.S. territory.

In conjunction with the issuance of the Series 2022-1 Notes, KBRA anticipates affirming the ratings on the Master Issuer’s outstanding Series 2019-1 Class A-2-II and Class A-2-III Notes (the “Existing Notes”, and together with the Series 2022-1 Notes, the “Notes”). The ratings are consistent with the results of our cash flow scenarios following the addition of the Series 2022-1 Notes.

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Related Publications

• Whole Business Securitization ABS Global Rating Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

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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