Moody's turns Traeger trend to negative

Moody's Investors Service said it turned the outlook to negative from stable but affirmed TGP Holdings III LLC's (Traeger) ratings including the B3 rating of the company's senior secured first-lien credit facility. 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, however, downgraded the company's speculative grade liquidity rating to SGL-3 from SGL-2.

“The negative outlook reflects Traeger's very high financial leverage due to the company's continued deterioration of profitability and cash flows amid a challenging operating environment and weakening consumer demand. The company expects to report revenue for fiscal year 2022 of $640 - $660 million, a year-over-year decline of -16% to -18.5%. Traeger also expects its company-adjusted EBITDA in fiscal 2022 at $35 - $45 million, or a year-over-year decline of -58% to -68%,” Moody’s said in a press release.

The weaker SGL reflects the forecast for negative free cash flows in fiscal 2022 from lower earnings and higher-than-normal inventory levels, the agency said.

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