Moody's upgrades Dayco

Moody's Investors Service said it upgraded Dayco Products, LLC's corporate family rating to B3 from Caa1, probability of default rating to B3-PD from Caa1-PD and senior secured term loan rating to B3 from Caa1.

“The upgrade reflects Dayco's strong performance thus far in 2021 as operational efficiencies and higher volumes have contributed to substantially improved earnings and margins. As a result, Dayco's financial leverage has improved from above 7.5x debt/EBITDA over the prior year to below 5.5x for the 12 months ending May 31, 2021,” the agency said in a press release.

The agency said it forecasts Dayco to maintain leverage in the mid-5x debt/EBITDA range over the next 12 months as aftermarket demand remains favorable and it supports an appropriate level of operational efficiencies to offset cost inflations.

The outlook remains positive.

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