KBRA upgrades one Service Experts note class, affirms six across issuer transactions

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KBRA upgrades Service Experts note

Highlights

KBRA upgrades one class and affirms ratings on six note classes from three Service Experts ABS transactions, citing sufficient and increased credit enhancement.
The September 2026 distribution review confirms all affected securities have received timely interest payments, with collateral performance and projected losses analyzed per KBRA's ABS methodology.
Service Experts, owned by Brookfield Infrastructure Partners with $262 billion AUM, maintains $400 million in warehouse lines and $200 million undrawn capacity as of September 30, 2026.

Rating actions and transaction review

As reported by Kroll Bond Rating Agency, KBRA affirms ratings on six classes of notes and upgrades one class of notes issued through three Service Experts transactions. The agency says existing credit enhancement is sufficient to support the revised and affirmed ratings, and that all securities with upgraded ratings have recorded increased credit enhancement.

The review uses data as of the September 2026 distribution date, covering the August 2026 collection period. KBRA says the securities have received timely interest payments to date.

In its analysis, KBRA applies its General Global Rating Methodology for Asset Backed Securities and its Global Structured Finance Counterparty Methodology. The agency also reviews collateral performance and projects remaining transaction losses using current assumptions, with related deal and tranche performance information available through its Service Experts Issuer Comprehensive Surveillance Dashboard.

Issuer profile and funding capacity

Advantage Experts Services LLC, which does business as Service Experts, has issued three transactions backed by residential retail lease contracts and agreements financing HVAC units, water treatment or similar equipment, water heating equipment and related maintenance contracts. The company has operated in the consumer and commercial equipment business since 1996, and began its HVAC and water heater leasing program in the U.S. in 2017.

As of September 30, 2026, Service Experts has about 2,850 employees and roughly 90 locations across 30 states. The company is owned by Brookfield Infrastructure Partners L.P. and its institutional partners, which KBRA describes as a major owner and operator of global infrastructure networks with $262 billion in assets under management.

Service Experts also has $400 million across two committed warehouse facilities with Citigroup and Credit Agricole. A corporate revolving credit facility remains available for working capital needs across subsidiaries, and aggregate undrawn capacity across the two warehouse facilities stands at about $200 million as of September 30, 2026.

In our earlier article, we discussed how geopolitical tensions and elevated fiscal spending are increasing borrowing and refinancing risks for sovereign issuers in a higher-rate environment. We noted that persistent inflationary shocks—amplified by conflicts that lift energy and food prices—can erode fiscal headroom and put pressure on credit outlooks, with emerging and frontier markets typically more exposed due to heavier debt-service burdens and narrower revenue bases.

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