Moody’s cuts Mister Car Wash loans, rates loan B1

Moody's Investors Service said it affirmed Mister Car Wash Holdings, Inc.'s B2 corporate family rating and B2-PD probability of default rating following the company's announced add-on to its senior secured first-lien term loan and incremental senior unsecured notes.

The agency also downgraded the term loan and revolving credit facility to B1 from Ba3, and assigned a B1 rating to the proposed $40 million delayed-draw term loan.

The outlook was changed to negative.

The proposed transaction includes a $180 million add-on to Mister Car Wash's first-lien term loan and an incremental $67.5 million of senior unsecured notes (unrated).

Proceeds will be used to fund a $213 million dividend to shareholders, repay the outstanding balance under the company's revolving credit facility (commitment upsized to $50 million from $45 million), and pay related fees and expenses.

The downgrade of the term loan and revolver to B1 from Ba3 reflects the application of Moody's Loss Given Default Methodology and the increased size of the first-lien facility relative to junior claims in the capital structure including the unsecured notes, trade payable and operating leases, the agency said.

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