Moody’s rates TruckPro notes B3

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to TPro Acquisition Corp. (TruckPro).

Concurrently, Moody's assigned a B3 rating to the company's proposed $300 million senior secured notes.

The outlook is stable.

Proceeds from the new notes will augment new equity from Platinum Equity Capital Partners in support of their acquisition of the company, as well as cover transaction fees and expenses.

As part of the financing, the company is expected to secure a $75 million five-year asset-based loan facility.

"TruckPro's exposure to demand for aftermarket parts for heavy duty commercial trucks is the principle rating driver. Modest macroeconomic growth indicators in the U.S., combined with relatively low operating margins at the company mean that earnings growth will rely largely on planned cost savings in the coming years,” Moody's lead analyst Andrew MacDonald said in a news release.

"Nonetheless, the company has a good scale within its niche market segment that should allow the business to gain share both organically and from acquisitions.”

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