Moody's trims Traeger

Moody's Investors Service said it trimmed TGP Holdings III LLC's (Traeger) ratings including its senior secured first-lien credit facility to B3 from B2. The first-lien credit facility consists of a $125 million first-lien revolver due 2026, a $510 million original amount first-lien term loan due 2028 and a $50 million delayed-draw first-lien term loan due 2028. Moody's also assigned a speculative grade liquidity of SGL-2.

The downgrade reflects Traeger's high financial leverage and expectations that debt/EBITDA leverage will increase in fiscal 2022 due to lower profitability than previous expectations driven by continued cost pressures and potential that lower demand for grills priced at less than $1,000 could persist amid inflation pressures on consumer budgets, the agency said.

Traeger borrowed from its revolving credit facilities to help fund the investments in working capital, which pushed its Moody’s-adjusted debt/EBITDA to around 5.8x as of fiscal year end Dec. 31. Moody’s said it estimates Traeger’s debt/EBITDA leverage will increase to more than 6.5x by the end of fiscal 2022.

The outlook is stable.

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