A newly established master trust for HW Bulk Issuer is coming to market with its first two series of notes and will raise about $2.1 billion secured by fiber network assets and customer contracts transferred from an existing securitization facility.
The HW Bulk Issuer, series 2026-1 and series 2026-2 will offer the securitized bonds through six tranches of the series notes, according to Kroll Bond Rating Agency.
Notes have an anticipated repayment dates ranging from October 2029 on the series 2026-1, A1V notes to the 2026-2 B notes, according to KBRA. Legal final maturity dates range from October 2056 through October 2058, the rating agency said.
The deal will repay notes through a subordination structure, KBRA said.
Morgan Stanley is the lead structuring agent and joint bookrunner, according to KBRA. Hotwire Communications and FTI Consulting are the manager and backup manager on the deal, respectively, while KeyBank National Association is the servicer.
The deal structure includes a liquidity reserve account that will keep on hand six months of fixed direct costs, fees and interest on classes A and B notes, and $8 million, KBRA said.
HW Bulk Issuer also has debt service coverage ratio (DSCR), so that if the senior DSCR is 1.50x or less, then half of available funds will be deposited into the cash trap reserve account. The rating agency adds that the senior DSCR is expected to be about 1.8x.
Also, if on any determination date the senior DSCR is below 1.25x, then an amortization period will begin. While class A notes remain outstanding, the transaction will defer interest on the class B notes and repay principal o the class A notes, instead.
The issuer owns, manages and operates fiber optic communication systems to deliver digital infrastructure services, which are delivered to multi-tenant properties like homeowner associations, condominium associations, apartments student housing, hotels and municipalities, KBRA said.
Assets in the deal consist primarily of fiber-to-the-home infrastructure, related easements, rights of use and other access agreements tied to consumer contracts.
KBRA assigns ratings of A- to the 2026-1 A1L, A1V and A2 tranches; BBB- to the 2026-1 B notes; A- to the 2026-2, A2 notes and BBB- to the 2026-2, B notes, the rating agency said.
