Bulletin: Dealer Tire Financial LLC's Proposed $75 Million First-Lien Term Loan Add-On Is Credit Neutral

CHICAGO (S&P Global Ratings) Jan. 12, 2024--S&P Global Ratings today said that Dealer Tire Financial LLC's (B-/Stable/--) proposed $75 million add-on to, and repricing of, its first-lien term loan will not significantly affect the company's credit quality. All of our ratings on Dealer Tire, including our 'B-' issuer credit rating and 'B-' issue-level rating and '3' recovery rating on its senior secured debt, are unchanged. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery prospects in a hypothetical default scenario. We expect the company will use the proceeds from the add-on to add cash to its balance sheet, increasing its pro forma liquidity to $390 million (including $151 million of cash and $239.2 million of

...January 12, 2024 CHICAGO (S&P Global Ratings) Jan. 12, 2024--S&P Global Ratings today said that Dealer Tire Financial LLC's (B-/Stable/--) proposed $75 million add-on to, and repricing of, its first-lien term loan will not significantly affect the company's credit quality. All of our ratings on Dealer Tire, including our 'B-' issuer credit rating and 'B-' issue-level rating and '3' recovery rating on its senior secured debt, are unchanged. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery prospects in a hypothetical default scenario. We expect the company will use the proceeds from the add-on to add cash to its balance sheet, increasing its pro forma liquidity to $390 million (including $151 million of cash and $239.2 million of availability under its cash flow revolver after netting its $10.8 million of outstanding letters of credit). The transaction will have a marginal effect on our forecast credit metrics for Dealer Tire in 2024-2025....

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