S&P rates RV Retailer B, loan B+

S&P said it assigned a B rating to RV Retailer Intermediate Holdings LLC and a B+ and 2 recovery rating to subsidiary RVR Dealership Holdings LLC’s (OpCo) planned $420 million of term loan B due 2028. The 2 rating indicates an expectation for substantial (70%-90%; rounded estimate: 75%) recovery for lenders in default.

“The B rating reflects RV Retailer’s highly acquisitive strategy, integration risks associated with rapid expansion, and a financial policy that could result in high leverage if large acquisitions are inadvertently completed concurrently with or immediately before an RV industry down cycle,” S&P said in a press release.

Loan proceeds will be used to refinance debt, pay a dividend to shareholders, complete acquisitions of identified targets and add liquidity for potential future acquisitions.

S&P gave the company a stable outlook and reflects expected healthy retail demand in 2021, adequate liquidity, cash flow generation and a leverage cushion that could ease potential financial risk spikes.

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