Fastlane Holding Co. Inc. Rating Raised To #B-# From #CCC+#, Removed From CreditWatch Outlook Stable

Stocks and Financial Services Press Releases Thursday April 12, 2018 10:00
NEW YORK--12 Apr--S&P Global Ratings

NEW YORK (S&P Global Ratings) April 11, 2018--S&P Global Ratings today raised its corporate credit rating on Dallas-based Fastlane Holding Co. Inc. to 'B-' from 'CCC+' and removed the rating from CreditWatch, where we placed it with positive implications on March 15, 2018. The outlook is stable.

At the same time, we affirmed our 'B-' issue-level rating on the company's $482 million first-lien term loan due in November 2022. Our '4' recovery rating indicates our expectation for average (30%-50%; rounded estimate: 30%) recovery in the event of payment default.

In addition, we affirmed our 'CCC' issue-level rating on Fastlane's $175 million second-lien term loan due in May 2023. Our '6' recovery rating indicates our expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of payment default.

The upgrade reflects our view that Fastlane's successful completion of its refinancing transaction eliminated upcoming refinancing risk and our corresponding liquidity concerns. Fastlane successfully extended the maturities of its first- and second-lien term loans by three years, to 2022 and 2023, respectively. Since the company's $250 million asset-based lending (ABL) revolver (unrated) becomes due at the earliest of Jan. 29, 2021, or 91 days before the maturity of its term loan, the transaction also extended the revolver's maturity to 2021. Under the final terms of the transaction, Fastlane increased its first-lien term loan by $85 million to $482 million and decreased its second-lien term loan by $25 million to $175 million. Fastlane used net proceeds (plus $3 million cash on its balance sheet) to repay a portion of its revolver balance (reducing the amount outstanding to approximately $103 million) and pay $25 million in transaction-related fees and expenses.

The stable outlook reflects our expectation that modest EBITDA growth will contribute to leverage improvement over the next few years. While we expect the company's FOCF generation to meaningfully improve from 2017, we still expect working capital outflows, related to the company's continued investment in product expansion, to pressure FOCF.

We could lower the ratings within the next 12 months if weaker-than-expected operating performance results in meaningfully negative free cash flow or strained liquidity. This could occur if Fastlane commits larger–than-expected working capital to fund the ongoing expansion of new products. Alternatively, we could also lower the ratings if we come to believe that Fastlane depends on favorable business, financial, and economic conditions to meet its financial commitments, or if we view the company's financial commitments as unsustainable in the long term, even though it may not face a credit or payment crisis within the next 12 months.

Although unlikely over the next 12 months given the company's high leverage, we could raise the rating if the company maintained ongoing revenue and EBITDA growth, such that adjusted debt to EBITDA declines toward 5x, and we expect this performance to be sustainable. In addition, to raise the rating, we would expect the company to generate free cash flow to adjusted debt approaching 5%.

Latest Press Release

TBANK registers strong performance with 14th straight growth in quarterly profit, driven by continuous lending expansion, and contributing to sustainable growth of its core businesses.

Thanachart Bank Public Company Limited (TBANK) reported a net profit of 3,821 million baht for the second quarter of 2018, up 1.11% from the prior quarter, and up 14.71% compared to the same quarter last year. Noteworthy is the fact that earnings have...

Fitch Rates Navanakorn Electricity#s Thai Baht Debentures #A-(tha)#

Fitch Ratings (Thailand) has assigned Navanakorn Electricity Generating Company Limited's (NNEG, A-(tha)/Stable) upcoming senior unsecured amortising debentures of up to THB6.4 billion a National Long-Term Rating of 'A-(tha)'. Proceeds will be used to...

DeeMoney Becomes Thailands ONLY Non-Bank to Hold International Money Transfer Money Exchange Licenses

International outbound and inbound money transfer and e-payment service, DeeMoney, operated by Thai-based international telecom provider, SawasdeeShop, is revolutionizing money transfers from and into Thailand and currency exchanges within Thailand with...

TMB Credit Card invites you to enjoy shopping and receive total cash back up to 60,000 Baht at HomePro Fair during 20-29 July 2018

TMB credit card satisfies its customers who love shopping home decors. Just shop at the HomePro Fair at Hall 5-8, IMPACT, Muang Thong Thani during July 20-29, 2018. No matter whether you pay in full or installment with TMB Pay Plan 0% up to 10 months,...

Photo Release: Bangkok Bank offers discounts up to 25% on registration fee for Bangkok Bank CycleFest 2018

Bangkok Bank invite all cyclists to join 'Bangkok Bank CycleFest 2018' under the concept of "Ride for All" on November 24 – 25, 2018 at Siam Country Club, Pattaya, Chonburi. Bangkok Bank as a main sponsor offers privileges for riders who register...

Related Topics