Moody's upgrades Holley

Moody's Investors Service said it upgraded Holley Purchaser, Inc.'s corporate family rating to B2 from B3 and probability of default rating to B2-PD from B3-PD and affirmed the senior secured first-lien bank credit facilities rating at B2. Moody's also assigned a SGL-2 speculative grade liquidity rating. The rating outlook has been changed to positive from stable.

“The upgrade reflects both the ongoing improvement in Holley's operating performance and its transition to being a publicly traded company following the completion of its business combination with Empower, Ltd., a special purpose acquisition company, or SPAC, in July 2021. Holley utilized $100 million of proceeds from the transaction to pay down a portion of its more expensive second-lien term loan, thus reducing interest expense and resulting in pro forma financial leverage of 3.9x debt/EBITDA at the end of June 2021,” Moody’s said in a press release.

The positive outlook reflects Holley’s potential to demonstrate a track record of executing on its stated financial policy goals as a public company, which could support financial leverage being kept below 4x debt/EBITDA on a Moody's adjusted-basis.

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