S&P rates Truck Holdings loans B, CCC+

S&P said it assigned a B corporate credit rating to Truck Holdings Inc.

The outlook is stable.

The agency also said it assigned a B rating and 3 recovery rating to the company's proposed $675 million first-lien term loan due 2024.

The 3 recovery rating indicates 50% to 70% expected default recovery.

S&P also said it assigned a CCC+ rating and 6 recovery rating to the company's proposed $250 million second-lien term loan due 2025.

The 6 recovery rating indicates 0 to 10% expected default recovery.

The borrower under the term loan and revolver is Truck Hero Inc., which is a wholly owned subsidiary of Truck Holdings, the agency explained.

The ratings reflect a belief that the company – a leading provider of truck bed covers for pickup trucks – is a relatively niche participant in the broader auto supplier market, S&P said.

Because the company sells products viewed as discretionary, it must successfully adapt to changes in consumer preferences to stay competitive, the agency said.

Truck Holdings also faces some integration risk given the aggressive pace of its acquisitions, S&P said.

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