Moody's boosts Savers Value Village

Moody's Investors Service said it upgraded Evergreen AcqCo 1 LP's (Savers Value Village) corporate family rating to B1 from B2, its probability of default rating to B1-PD from B2-PD, its senior secured first-lien term loan, senior secured first-lien revolving credit facility and its backed senior secured first-lien notes ratings to B1 from B2. At the same time, Moody's assigned an SGL-1 speculative grade liquidity rating.

“The upgrade reflects governance considerations including Savers Value Village's debt repayment using the proceeds from its initial public offering which, along with the company's solid operating performance, has resulted in enhanced credit metrics. The upgrade also reflects Moody's expectation for continued solid operating performance as it will continue to benefit from favorable demand trends for low-cost thrift store clothing and hard goods which will lead to further improvement in credit metrics over the next 12-18 months.

“Savers Value Village's newly assigned SGL-1 represents very good liquidity including meaningful excess cash, solid free cash flow generation and nearly full availability under its $75 million revolving credit facility as of Sept. 30, 2023, fueled by high margins on low-cost inventory sourced from on-site donations, non-profit partners, and GreenDrop locations,” Moody’s said in a press release.

The outlook is maintained at stable.

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