EX-99.1 2 ef20010949_ex99-1.htm EXHIBIT 99.1
Exhibit 99.1


Independent Accountants’ Agreed-Upon Procedures Report

 
Flexential Parent Corporation (the “Company”)
Guggenheim Securities, LLC (the “Structuring Agent”)
(together, the “Specified Parties”)
 
Re:
Flexential Issuer, LLC and Flexential Co-Issuer, LLC, Secured Data Center Revenue Term Notes, Series 2023-1 – Data File Procedures
 
We have performed the procedures described below on the specified attributes in an electronic data file entitled “Flexential 2023-1 Tape-to-File (6.29.23).xlsx” provided by the Structuring Agent on June 29, 2023, on behalf of the Company, containing information on 32,710 data center service order agreements (the “Service Orders”) as of April 30, 2023 (the “Data File”), which we were informed are intended to be included as collateral in the offering by Flexential Issuer, LLC and Flexential Co-Issuer, LLC. The Company is responsible for the specified attributes identified by the Company in the Data File.

The Specified Parties have agreed to and acknowledged that the procedures performed are appropriate to meet their intended purpose of assisting specified parties in evaluating the accuracy of the specified attributes in the Data File. This report may not be suitable for any other purpose. No other parties have agreed to or acknowledged the appropriateness of these procedures for the intended purpose or any other purpose.
 
The procedures performed may not address all the items of interest to a specified party of this report and may not meet the needs of all specified parties of this report and, as such, specified parties are responsible for determining whether the procedures performed are appropriate for their purposes. We make no representation regarding the appropriateness of the procedures either for the intended purpose or for any other purpose.

Unless otherwise stated, the following definitions have been adopted in presenting our procedures and findings:
 
•
The term “compared” means compared to the information shown and found it to be in agreement, unless otherwise stated. Such compared information was deemed to be in agreement if differences were within the reporting threshold.
 
•
The term “recomputed” means recalculated and compared the result to the information shown and found it to be in agreement, unless otherwise stated. Such recomputed information was deemed to be in agreement if differences were within the reporting threshold.
 
•
The term “reporting threshold” means that dollar amounts were within $1.00, percentages were within 0.1%, Customer Since Date was within 45 days, and Contract End Date was within 30 days.
 
•
The term “Statistical Disclosure Date” means April 30, 2023.
 
•
The term “Top 25 Tenants” means the top 25 tenants based on aggregated “Annualized Revenue” of the respective Service Orders in the Data File.
 
•
The term “Regular Tenants” means tenants that are not Top 25 Tenants.



•
The term “Service Order Information” means electronic copies of the following documents provided by the Company or the Structuring Agent, on behalf of the Company: (i) data center service orders, amended and/or restated service orders, change order agreements, and master service agreements, (ii) Company’s accounting system screenshots, and (iii) service order invoices. We make no representation regarding the validity or accuracy of the Servicer Order Information.
 
•
The term “Supporting Information Files” means the following electronic data files provided by the Structuring Agent, on behalf of the Company, containing instructions and information on (i) service order name changes, (ii) contract term updates, (iii) monthly net price updates, (iv) quantity changes, and (v) auto renewal terms:
 

 –
“Flexential 2023-1 Initial Exceptions 6.30.23 (Response 7.6.23).xlsx” provided on July 10, 2023;
 

 –
“SENT - Flexential 2023-1 Exceptions 7.13.23 Response 7.17.23.xlsx” provided on July 19, 2023;
 

 –
“SENT - Flexential 2023-1 Exceptions 7.20.23 Response 7.21.23.xlsx” provided on July 23, 2023;
 

 –
“Copy of SENT - Flexential 2023-1 Exceptions 7.23.23 Response 7.24.23.xlsx” provided on July 24, 2023; and,
 

 –
“Copy of SENT - Flexential 2023-1 Exceptions 7.24.23 Response 7.24.23.xlsx” provided on July 26, 2023.
 
•
The term “Mapping Information” means two electronic data files entitled “Product Mapping Backup (6.29.23).xlsx” and “Site Location Mapping Backup (6.29.23).xlsx” provided by the Structuring Agent on June 29, 2023 and July 5, 2023, respectively, on behalf of the Company, containing mapping information for Data Center Name, Site/Location, and Product Family with respect to the Service Orders.
 
•
The term “Source Documents” means the Service Order Information, Supporting Information Files, and Mapping Information.
 
•
The term “Instructions” means the instructions provided by the Company pertaining to a procedure, attribute, or methodology, as described in Exhibit B.
 
•
The term “Provided Information” means the Statistical Disclosure Date, Source Documents, and Instructions.
 
Prior to being provided the Data File, we received one or more earlier versions of the data file on which to perform our procedures. In performing those procedures, we identified differences which were communicated to the Specified Parties. The Data File represents the revised information reflecting resolution of differences communicated as determined appropriate by the Specified Parties. We performed the procedures on the Data File, and the results of those procedures are reflected herein.
 
The procedures we were instructed by the Company to perform and the associated findings are as follows:
 
A.
We randomly selected a sample of 100 Service Orders from the Data File as follows:


(i)
Selected one Service Order from each of the Top 25 Tenants’ Service Orders (the “Top Tenant Sample”), and
 

 (ii)
Selected 75 Service Orders from the Regular Tenants’ Service Orders (the “Regular Tenant Sample”).

The Top Tenant Sample and the Regular Tenant Sample constitute the “Selected Service Orders.” A listing of the Selected Service Orders is attached hereto as Exhibit A. For purposes of this procedure, the Company did not inform us of the basis they used to determine the number of Services Orders we were instructed to randomly select from the Data File.
 
2

B.
For each Selected Service Order, we compared or recomputed the information in the Data File for the specified attributes listed in Exhibit B to or using the corresponding information included in the Source Documents, utilizing the Instructions, as applicable. The Specified Parties indicated that the absence of any of the information in the Source Documents or the inability to agree the indicated information from the Data File to the Source Documents for each of the attributes identified, utilizing the Instructions as applicable, constituted an exception.
 
We found such information to be in agreement except as listed in Exhibit C.
 
We were engaged by the Company to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants, which involves us performing the specific procedures agreed to and acknowledged above and reporting on findings based on performing those procedures. We were not engaged to, and did not, conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the specified attributes in the Data File. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported.

We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

The procedures performed were applied based on the information included in the Data File and Provided Information, without verification or evaluation of such information by us; therefore, we express no opinion or any other form of assurance regarding (i) the reasonableness of the information provided to us by the Company, (ii) the physical existence of the Service Orders, (iii) the reliability or accuracy of the Provided Information which was used in our procedures, or (iv) matters of legal interpretation.

The procedures performed were not intended to address, nor did they address: (i) the conformity of the origination of the Service Orders to stated underwriting or credit extension guidelines, standards, criteria or other requirements, (ii) the value of collateral securing any such Service Orders being securitized, (iii) the compliance of the originator of the  Service Orders with federal, state, and local laws and regulations, or (iv) any other factor or characteristic of the Service Orders that would be material to the likelihood that the issuer of the asset-backed securities will pay interest and principal in accordance with applicable terms and conditions. The procedures performed were not intended to satisfy any criteria for due diligence published by the nationally recognized statistical rating organizations (“NRSROs”).
 
The terms of our engagement are such that we have no responsibility to update this report because of events and circumstances that may subsequently occur.
 
This report is intended solely for the information and use of the Specified Parties. It is not intended to be and should not be used by any other person or entity, including investors or the NRSROs, who are not identified in the report as the Specified Parties but may have access to this report as required by law or regulation.


 /s/KPMG LLP
Irvine, California
September 8, 2023

3
THE FOLLOWING PAGES CONSTITUTE EXHIBIT A.

Selected
Service Order #
Subscription
Summary
Top Tenant?
Selected
Service Order #
Subscription
Summary
Top Tenant?
1
SubSum-239726
yes
26
SubSum-169128
no
2
SubSum-214281
yes
27
SubSum-239911
no
3
SubSum-183970
yes
28
SubSum-151827
no
4
SubSum-222550
yes
29
SubSum-224794
no
5
SubSum-195277
yes
30
SubSum-201010
no
6
SubSum-254216
yes
31
SubSum-72271
no
7
SubSum-208777
yes
32
SubSum-130218
no
8
SubSum-215767
yes
33
SubSum-36961
no
9
SubSum-250427
yes
34
SubSum-14902
no
10
SubSum-157803
yes
35
SubSum-246624
no
11
SubSum-229602
yes
36
SubSum-249591
no
12
SubSum-219968
yes
37
SubSum-185300
no
13
SubSum-101022
yes
38
SubSum-59817
no
14
SubSum-80097
yes
39
SubSum-234515
no
15
SubSum-227247
yes
40
SubSum-124307
no
16
SubSum-141332
yes
41
SubSum-233223
no
17
SubSum-221683
yes
42
SubSum-253265
no
18
SubSum-197930
yes
43
SubSum-218124
no
19
SubSum-225782
yes
44
SubSum-241977
no
20
SubSum-246157
yes
45
SubSum-202563
no
21
SubSum-210233
yes
46
SubSum-44220
no
22
SubSum-211237
yes
47
SubSum-182533
no
23
SubSum-198963
yes
48
SubSum-155244
no
24
SubSum-244435
yes
49
SubSum-218177
no
25
SubSum-254050
yes
50
SubSum-211817
no

Selected
Service Order #
Subscription
Summary
Top Tenant?
Selected
Service Order #
Subscription
Summary
Top Tenant?
51
SubSum-205190
no
76
SubSum-162508
no
52
SubSum-141392
no
77
SubSum-199393
no
53
SubSum-230197
no
78
SubSum-240189
no
54
SubSum-166406
no
79
SubSum-251403
no
55
SubSum-243356
no
80
SubSum-186873
no
56
SubSum-202795
no
81
SubSum-218646
no
57
SubSum-191118
no
82
SubSum-231724
no
58
SubSum-73394
no
83
SubSum-173724
no
59
SubSum-62618
no
84
SubSum-8628
no
60
SubSum-203707
no
85
SubSum-149108
no
61
SubSum-247835
no
86
SubSum-237099
no
62
SubSum-200354
no
87
SubSum-215880
no
63
SubSum-213290
no
88
SubSum-197694
no
64
SubSum-243788
no
89
SubSum-148364
no
65
SubSum-189161
no
90
SubSum-222014
no
66
SubSum-217807
no
91
SubSum-222013
no
67
SubSum-216770
no
92
SubSum-224845
no
68
SubSum-140428
no
93
SubSum-171245
no
69
SubSum-151064
no
94
SubSum-214900
no
70
SubSum-222782
no
95
SubSum-218186
no
71
SubSum-232535
no
96
SubSum-96613
no
72
SubSum-230411
no
97
SubSum-247176
no
73
SubSum-243511
no
98
SubSum-14667
no
74
SubSum-201845
no
99
SubSum-214469
no
75
SubSum-253915
no
100
SubSum-249775
no

THE FOLLOWING PAGE CONSTITUTES EXHIBIT B.

#
Attribute
Source Documents / Instructions
     
1
Subscription Summary
Not applicable. Unique identifier for information purposes only.
     
2
Account Name
Service Order Information, Supporting Information Files
     
3
Customer Since (Date)
Service Order Information
     
4
Data Center Name
If Data Center Name was not listed in the Service Order Information, compare Data Center Name using the Mapping Information
     
5
Market
Service Order Information
     
6
Site / Location
If Site / Location was not listed in the Service Order Information, compare Site / Location using the Mapping Information
     
7
Contract Term (in months)
Service Order Information, Supporting Information Files
     
8
Auto Escalator Percentage
Service Order Information
     
9
Product Family
If Product Family was not listed in the Service Order Information, compare Product Family using the Mapping Information
     
10
Quantity
(units vary per Product Family and Business Service)
Service Order Information, Supporting Information Files
     
11
Auto Renewal Term (in months)
Service Order Information, Supporting Information Files
     
12
Monthly Net Price / Total MRR (Monthly Recurring Revenue)
If Monthly Net Price / Total MRR was listed in the Service Order Information or Supporting Information Files as of a date other than the Statistical Disclosure Date, recompute using the Auto Escalator Percentage and time between the listed as-of date and Statistical Disclosure Date and the following formula:
 
Monthly Net Price / Total MRR = (listed Monthly Net Price / Total MRR) * (1 + Auto Escalator Percentage) ^ n,
 
where n is equal to the time, in years, between the listed as-of date and Statistical Disclosure Date
     
13
ContractEndDate
If Contract End Date was not listed in the Service Order Information or Supporting Information Files, recompute as the contract start date listed in Service Order Information plus Contract Term
     
14
Remaining Term (in months)
Recompute as the number of months between the Statistical Disclosure Date and ContractEndDate
     

THE FOLLOWING PAGE CONSTITUTES EXHIBIT C.

Selected
Service
Order #
Subscription
Summary
Attribute
 Per Data File
Per Source Documents
1
SubSum-225782
Customer Since (date)
8/1/1994
11/2/2016
2
SubSum-210233
Customer Since (date)
2/15/2013
12/23/2012
3
SubSum-211237
Contract Term (in months)
126
120
4
SubSum-151827
Customer Since (date)
5/31/2017
1/9/2015
5
SubSum-218124
Contract Term (in months)
49
48
6
SubSum-59817
Contract Term (in months)
48
46
7
SubSum-185300
Customer Since (date)
9/26/2007
5/28/2009
8
SubSum-254216
Auto Escalate Percentage
5%
2%
9
SubSum-254216
Auto Renewal Term (in months)
12
1
10
SubSum-80097
Contract Term (in months)
73
60
11
SubSum-80097
Auto Renewal Term (in months)
3
60
12
SubSum-80097
ContractEndDate
6/30/2023
6/30/2027
13
SubSum-80097
Remaining Term (in months)
2
50
14
SubSum-211237
ContractEndDate
7/31/2029
5/31/2029
15
SubSum-211237
Remaining Term (in months)
75
73
16
SubSum-59817
ContractEndDate
11/30/2023
9/30/2023
17
SubSum-59817
Remaining Term (in months)
7
5
18
SubSum-218124
ContractEndDate
5/31/2023
4/30/2023
19
SubSum-218124
Remaining Term (in months)
1
0
20
SubSum-241977
Customer Since (date)
7/1/2008
12/31/2009
21
SubSum-249775
Customer Since (date)
2/1/2015
4/26/2015
22
SubSum-215880
Contract Term (in months)
42
36
23
SubSum-218646
Customer Since (date)
4/26/2006
4/6/2012
24
SubSum-186873
Customer Since (date)
1/9/2003
10/24/2006
25
SubSum-251403
Customer Since (date)
5/16/2007
3/22/2007
26
SubSum-232535
Customer Since (date)
12/31/2016
5/1/2017
27
SubSum-243356
Contract Term (in months)
53
36
28
SubSum-96613
Contract Term (in months)
34
32
29
SubSum-96613
ContractEndDate
4/30/2023
6/30/2023
30
SubSum-96613
Remaining Term (in months)
-
2
31
SubSum-14667
Contract Term (in months)
34
36
32
SubSum-73394
Contract Term (in months)
66
72