Moody’s rates Mavis Tire B3

Moody’s Investors Service said it assigned ratings to Mavis Tire Express Services TopCo, LP, including a B3 corporate family rating, a B3-PD probability of default rating, B2 ratings on the planned senior secured bank credit facilities and a Caa2 rating on the proposed senior unsecured notes.

Affiliates of BayPine and TSG Consumer will use the planned facilities, cash equity, a convertible preferred pay-in-kind issue and rollover equity th acquire Mavis.

“Today’s assignments acknowledge the initial increase in Mavis’ leverage that will occur as a result of its acquisition by affiliates of BayPine and TSG Consumer in a fully priced transaction, which comes on the heels of the November 2020 acquisition of Town Fair Tire, which added roughly $470 million in debt,” stated Charlie O’Shea, a Moody’s vice president in a press release.

“Out of the box leverage following close of this new financing structure will be well above our eight times downgrade trigger; however, it is Moody’s view that favorable industry fundamentals, as well as solid recent performance of its largely legacy business, combined with the addition of Town Fair, will result in leverage reducing over the next 12-18 months such that it will be within our band of tolerance for the B3 rating, which is a critical rating factor,” continued O’Shea.

The outlook is stable.

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