To cap off an already exciting past few days, we are pleased to announce the successful close of FAT Brands Inc.’s (NAS: FAT) $144 million whole business securitization — the largest structured product transaction in Percent’s history.
Percent served as the co-lead underwriter on this transaction along with Jefferies LLC, making it our third with the company known for iconic franchise brands like Fatburger and Johnny Rockets. This note refinanced two FAT Brands securitization transactions from 2020 (in which Percent acted as the sole lead underwriter), ultimately lowering the company’s marginal cost of capital to 5.92%. After acquiring Johnny Rockets last year, FAT aims to use proceeds of the transaction to bolster FAT’s acquisition growth strategy.
This note also further validates Percent’s ability to bring first-time issuers to the institutional markets and support their growth with investors who understand and value the benefits of becoming capital partners to high growth companies.
“It was a pleasure working alongside Jefferies on this financing milestone for FAT Brands as they continue to scale and are poised to thrive in a post-pandemic environment ” says Prath Reddy, Percent’s President. “We look forward to following a similar playbook with other first-time issuers seeking to dramatically reduce their cost of capital from the institutional structured credit markets.”
“From a demand standpoint, the deal sold expediently over a few days,” says Surat Maheshwari, Head of Institutional Securities at Percent. “We received interest from significantly more investors than the last two transactions combined.”
While this may not look and feel like a conventional transaction we normally involve ourselves with, our responsibility lies in helping originators and first time issuers grow and scale. As our originator partners get larger and larger, moving from Retail to Prime and beyond, they will need to tap into the institutional markets as a first-time issuer — much like FAT Brands has done — and we will be ready to take them to that next level.
To learn more about Whole Business Securitization, read Percent’s Whole Business Securitization in 2020 retrospective.