What is the total short-term and long-term debt for Corcoran?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
| Interest | Expiration | Principal | Premium and Debt | ||
|---|---|---|---|---|---|
| Rate | Date | Amount | Issuance Costs | Net Amount | |
| Revolving Credit Facility (a) . . . . . . . . . . . . . . . . (b) | July 2027 (b) | $ 490 | $ * | $ 490 | |
| Senior Secured Second Lien Notes (c) . . . . . . . . 7.00% | April 2030 | 640 | 10 630 | ||
| Senior Notes (d) . . . . . . . . . . . . . . . . . . . . . . . . . . 5.75% | January 2029 | 558 | — 558 | ||
| Senior Notes (d) . . . . . . . . . . . . . . . . . . . . . . . . . . 5.25% | April 2030 | 449 | 5 444 | ||
| Exchangeable Senior Notes (e) . . . . . . . . . . . . . . 0.25% | June 2026 | 403 | 4 399 | ||
| Total Short-Term & Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 2,540 | $19 $ 2,521 | |||
| Securitization obligations: (f) | |||||
| Apple Ridge Funding LLC . . . . . . . . . . . . . . . . . . . . . . | May 2025 | $ 140 | $ * | $ 140 |
Source: Item 23 — RECEIPTS (FDD pages 75–276)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, the total short-term and long-term debt is listed as $2,540, with $19 in premium and debt issuance costs, resulting in a net amount of $2,521. This figure represents the combined total of several debt instruments, including a Revolving Credit Facility due in July 2027 with an outstanding principal of $490, Senior Secured Second Lien Notes at 7.00% due in April 2030 with a principal of $640, Senior Notes at 5.75% due in January 2029 with a principal of $558, Senior Notes at 5.25% due in April 2030 with a principal of $449, and Exchangeable Senior Notes at 0.25% due in June 2026 with a principal of $403.
For a prospective Corcoran franchisee, understanding the debt structure of the franchisor is crucial. A high level of debt could indicate financial instability, which might affect Corcoran's ability to support its franchisees or invest in the brand. It is important to note that the Revolving Credit Facility and securitization obligations have debt issuance costs classified as deferred financing assets. The Senior Secured Credit Agreement also contains financial covenants, including maintaining a maximum permitted senior secured leverage ratio, which Corcoran must comply with.
Furthermore, the FDD mentions securitization obligations, specifically with Apple Ridge Funding LLC, due in May 2025, amounting to $140. These obligations are separate from the total short-term and long-term debt but represent another form of liability for Corcoran. Prospective franchisees should evaluate how these debts and obligations might impact Corcoran's financial health and its capacity to provide ongoing support and resources to its franchise network. Understanding the maturity dates and interest rates associated with each debt instrument can provide additional insight into the franchisor's financial obligations and potential risks.