NEW YORK--()--KBRA assigns preliminary ratings to Blue Stream Issuer, LLC Series 2024-1 (Blue Stream 2024-1) from Blue Stream Issuer, LLC (the Issuer), a communications infrastructure securitization. Concurrently, KBRA is placing the outstanding ratings on the Blue Stream Issuer, LLC Series 2023-1 Class A-1-V Notes, Class A-2 Notes, and Class B Notes on Watch/Upgrade, and expects to affirm the ratings on the Blue Stream Issuer, LLC Series 2023-1, Class C Notes at the time Series 2024-1 closes.

Blue Stream 2024-1 represents Blue Stream Communications LLC’s (Blue Stream, the Company, or the Parent) second securitization. The proceeds from the sale of the Notes will primarily be used to repay a portion of the indebtedness relating to the Fiber Networks, repay the outstanding balance of the Series 2023-1 Class A-1-V Notes, fund various transaction accounts, pay certain expenses, and for general corporate purposes, including distributions to the parent for growth capital expenditures.

The business of the Issuer is to own, manage and operate fiber optic communication systems for the delivery of digital infrastructure services used by multi-dwelling units (MDUs) and/or multi-tenant properties. The Issuer provides certain packaged services for a bulk rate (each a Bulk Contract) to the contract counterparty. Contract counterparties include homeowners’ associations (HOAs), condominium associations (COAs), hotels, municipalities (each a Community) as well as individual residents within a Community, and individual residents under a Right of Entry (ROE) Contract. The assets consist primarily of fiber-to-the-home (FTTH) infrastructure and in certain limited cases, coaxial cable, related easements, rights of use and other access agreements (collectively, Fiber Network Assets), related customer contracts and a shared infrastructure servicer agreement for use of certain shared assets necessary to operate such Fiber Network Assets. Each collection of Fiber Network Assets within a specific Community is referred to as a “Fiber Network”.

As of July 31, 2024 (the Series 2024-1 Cut-off Date or Cut-off Date), the Issuer provides internet and cable services through 254 networks located throughout Florida, which have an aggregate Annualized Run Rate Revenue (ARRR) of approximately $117.4 million and an Annualized Run Rate Net Operating Income (ARRNOI) of approximately $66.8 million.

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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.

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