Moody's slashes Wheel Pros

Moody's Investors Service said it downgraded Wheel Pros, Inc.’s ratings, including the company's senior secured term loan to Caa3 from Caa1 and senior unsecured notes to C from Caa3. The agency revised the outlook to stable from negative.

“The ratings downgrades reflect Moody's view that the potential for a debt restructuring, which the rating agency could consider a distressed exchange, has increased materially. Wheel Pros' earnings have meaningfully declined in 2022, resulting in debt/EBITDA that Moody's expects will be elevated at unsustainable levels over the next 12-18 months. Further, liquidity remains weak with limited availability under the asset-based credit facility (ABL) and the likelihood of negative free cash flow in 2023,” the agency said in a press release.

The stable outlook reflects the forecast that Wheel Pros’ will hover at a lower base over the next 12 months but debt/EBITDA will remain higher at unsustainable levels, Moody’s said.

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