Moody’s downgrades GC EOS Buyer

Moody’s Investors Service said it downgraded the ratings of GC EOS Buyer, Inc. (BBB Industries), including the corporate family rating to Caa1 from B3, the probability of default rating to Caa1-PD from B3-PD, the first-lien secured rating to Caa1 from B3 and the second-lien secured rating to Caa3 from Caa2.

The outlook is negative. The downgrades conclude the review Moody’s started on March 26, the agency said.

“The downgrades reflect Moody’s expectations for BBB Industries’ credit metrics to be weaker than expected due to the recession brought on by the coronavirus outbreak, including debt/EBITDA to be above 7x into 2021 and free cash flow to be modestly negative during 2020. Moody’s expects demand for BBB’s products, mainly non-discretionary replacement automotive parts, to be down in the single-digit range for 2020 as the total number of miles driven is reduced and consumers put off certain vehicle maintenance needs in the face of high unemployment,” the agency said in a press release.

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