Moody's rates TaylorMade, loan B1

Moody's Investors Service said it gave a B1 corporate family rating, a B1-PD probability of default rating to 19th Holdings Golf, LLC (TaylorMade) and assigned a B1 rating to the company's planned $1.05 billion first-lien term loan B.

“Moody's expects that consumer behavior will continue to benefit TaylorMade over the next 12-18 months as disruptions from the coronavirus and various variants linger. Moody's expects golfing will remain strong in 2022 given it is conducive to social distancing. However, there remains risk that some participants may reduce golfing as the coronavirus subsides,” the agency said in a press release.

Moody’s said it sees TaylorMade's 2022 sales growing by about 6% reflecting new product launches and the continued popularity of the sport with some offset from strong pandemic related growth. “Past 2022, sales and EBITDA growth will moderate to 2%-3% per year as the company will continue to increase pricing as new technologies and features are rolled out.”

TaylorMade plans to use the term loan to refinance debt that was employed to fund the Centroid Investment Partners buyout and related transaction fees and expenses. The company also plans to secure a new $300 million asset-based revolver expected to be unrated and undrawn at close.

The outlook is stable.

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