Morningstar DBRS Confirms Credit Ratings on Coinstar Funding, LLC, Series 2017-1 and Series 2018-1

DBRS, Inc. (Morningstar DBRS) confirmed credit ratings on two securities issued by Coinstar Funding LLC, asset-backed securities (ABS) transactions.

The rationale for the rating recommendations considers the following factors:

-- Amendments were executed with noteholder consent for a partial waiver of the April 2023 anticipated repayment date ('ARD') rapid amortization event for approximately three years, ending in April 2026. However, this also added net debt of approximately $43 million to the transaction in the form of a Manager Advance Term Loan that is senior in payment priority to the rated ABS notes. This resulted in a lower breakeven cash flow result that would be factored into the total debt quantum though not included in the definition of senior ABS debt.

-- As of Q1 2025, $20 million of the Manager Advance Term Loan has been paid down, lowering future senior payment obligations.

-- Revenue has been on a slow but gradual improvement since 2021, returning to pre-COVID pandemic levels in 2023, supported by modest kiosk count increase (1% YOY in 2023 and 2024) and relatively steady volume coin transactions.

-- The transaction includes performance-based triggers that, if tripped, will cause cash trapping for the benefit of the notes or, in case of more severe stress, trigger a rapid amortization. Key performance metrics are trending positively as of April 2025: DSCR was 2.84x, IO DSCR was 3.43x, and the Senior ABS Leverage Ratio was 5.51x, all within performance trigger thresholds.

-- Quarterly Net Cash flow and LTM Securitization Net Cash Flow increased by $5.26 million and $10.16 million, respectively, compared to the same period last year. As of April 2025, the Quarterly Net Cash flow stood at $37.56 million and the LTM Securitization Net Cash Flow was at $155.46 million.

--The transaction parties' capabilities with respect to manager, back up manager and servicer.

-- The Transaction assumptions consider Morningstar DBRS' baseline macroeconomic scenarios for rated sovereign economies, available in its commentary, "Baseline Macroeconomic Scenarios for Rated Sovereigns March 2025 Update," published on March 26, 2025. These baseline macroeconomic scenarios replace Morningstar DBRS' moderate and adverse coronavirus pandemic scenarios, which were first published in April 2020.

Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS

There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025), https://dbrs.morningstar.com/research/454196.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology applicable to the credit ratings is Morningstar DBRS Master U.S. ABS Surveillance (June 17, 2025) https://dbrs.morningstar.com/research/456340.

Other methodologies referenced in this transaction are listed at the end of this press release.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website
https://dbrs.morningstar.com/understanding-ratings

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.

DBRS, Inc.
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The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

Operational Risk Assessment for U.S. ABS Originators & Servicers (March 26, 2025)
https://dbrs.morningstar.com/research/450709

Legal Criteria for U.S. Structured Finance (December 03, 2024)
https://dbrs.morningstar.com/research/444064

Rating U.S. Structured Finance Transactions (March 10, 2025)
https://dbrs.morningstar.com/research/449616

For more information on this credit or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.