Research Update: Auction.com Holding Co. Inc. Downgraded To 'CCC+' From 'B-' On Cash Flow Deficits And Elevated Leverage; Outlook Stable

California-based Auction.com Holding Co. Inc.'s operating performance remains weak due to depressed foreclosure inventory over the past three years. We expect the pace and magnitude of Auction.com's recovery through 2025 will be lower than our previous forecast. While the timing of a recovery for foreclosure sales activity is uncertain, we now expect credit metrics will remain pressured over the next 12 to 18 months. We view the company's capital structure as unsustainable given its challenging business prospects, continued cash burn, and elevated leverage of well over 10x in 2024. We expect the company will continue to use its cash on hand to meet its debt obligations into 2025. Therefore, we lowered our issuer credit rating on Auction.com to 'CCC+' from

...- California-based Auction.com Holding Co. Inc.'s operating performance remains weak due to depressed foreclosure inventory over the past three years. We expect the pace and magnitude of Auction.com's recovery through 2025 will be lower than our previous forecast. While the timing of a recovery for foreclosure sales activity is uncertain, we now expect credit metrics will remain pressured over the next 12 to 18 months. - We view the company's capital structure as unsustainable given its challenging business prospects, continued cash burn, and elevated leverage of well over 10x in 2024. We expect the company will continue to use its cash on hand to meet its debt obligations into 2025. - Therefore, we lowered our issuer credit rating on Auction.com to '###+' from 'B-' and our issue-level rating on the company's first-lien debt to '###+' from 'B-'. We also revised the recovery rating on the company's first-lien debt to '4' from '3'. - The stable outlook reflects our belief that despite expected...

Research Update