Moody's ups Mister Car Wash

Moody's Investors Service said it upgraded Mister Car Wash Holdings, Inc. corporate family rating to B2 from B3 and the probability of default rating to B2-PD from B3-PD.

The agency affirmed the senior secured bank credit facility at B2, and changed the outlook to positive from negative. In addition, Moody's assigned a speculative grade liquidity rating of SGL-1 and a B2 rating to the company's new senior secured revolver.

"The upgrade recognizes the favorable impact on Mister Car Wash's credit metrics of the substantial paydown of debt with the proceeds of its recent IPO," stated Charlie O'Shea, a Moody's vice president, in a press release.

"Debt/EBITDA proforma for the reduction settles in at around 5.5 times, and EBIT/interest will be around two times, both of which are far better than the existing upgrade triggers," continued O'Shea. "The positive outlook reflects the improving segment fundamentals and permanent operating efficiencies that the company realized during the height of the pandemic support further earnings growth and credit metric improvement."

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