Research Update: Bombardier Recreational Products Inc. Outlook To Positive From Negative On Lower Leverage Expectations;Affirmed At 'BB-'

We anticipate steadily improving consumer demand for motorized recreational vehicles amid a low inventory level at dealerships could support Valcourt, Que.-based recreational vehicle manufacturer Bombardier Recreational Products Inc.'s (BRP) topline and EBITDA growth in fiscal 2022. As a result, we now forecast BRP's gross debt to EBITDA (S&P Global Ratings' adjusted) to be about 3.0x for fiscal 2022 compared with our previous forecasts of about 5.0x. Therefore, on Dec. 16, 2020, S&P Global Ratings revised its outlook on BRP to positive from negative, and affirmed its 'BB-' long-term issuer credit rating on the company. At the same time, we affirmed our issue-level ratings on BRP's asset-backed loan (ABL) at 'BB+' and senior secured debt (term loan B) at 'BB-'. The

...- We anticipate steadily improving consumer demand for motorized recreational vehicles amid a low inventory level at dealerships could support Valcourt, Que.-based recreational vehicle manufacturer Bombardier Recreational Products Inc.'s (BRP) topline and EBITDA growth in fiscal 2022. - As a result, we now forecast BRP's gross debt to EBITDA (S&P Global Ratings' adjusted) to be about 3.0x for fiscal 2022 compared with our previous forecasts of about 5.0x. - Therefore, on Dec. 16, 2020, S&P Global Ratings revised its outlook on BRP to positive from negative, and affirmed its '##-' long-term issuer credit rating on the company. - At the same time, we affirmed our issue-level ratings on BRP's asset-backed loan (ABL) at '##+' and senior secured debt (term loan B) at '##-'. The recovery ratings on the ABL and term loan are unchanged at '1' and '4', respectively. - The positive outlook reflects our view that we could raise the ratings within the next 12 months if the consumer demand for BRP's...

Research Update