Moody’s views Liquid Tech positively

Moody’s Ratings said it changed the outlook for Liquid Tech Solutions Holdings, LLC to positive from stable and affirmed the company's B3 corporate family rating, the B3-PD probability of default rating and the B3 rating on the senior secured first-lien credit facilities.

“The positive outlook reflects Moody's expectation that Liquid Tech's credit metrics will continue to strengthen and its good liquidity will be sustained. Moody's further expects that the company will continue to diversify its geographic footprint while maintaining a financial policy that balances the pursuit of acquisitive growth with a modest impact on leverage. Moody's further expects strong demand in the company's end markets that will continue to improve as freight volumes are expected to pick up in the second half of 2024,” the agency said in a statement.

The agency said it forecasts Liquid Tech to sustain an EBITDA margin of around 5% and debt to EBITDA to improve to around 4.5x in the next 12-18 months from 4.8x at year-end 2023.

Moody’s said it could upgrade Liquid Tech with sustained earnings growth that results in stronger credit metrics, including maintaining debt to EBITDA below 5x and EBITDA margin of around 5%. Conversely, it could lower the company’s ratings if debt to EBITDA were to persist above 6.5x.

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