S&P snips Wheel Pros

S&P said lowered its ratings on Wheel Pros Inc. and its senior secured debt to CCC from CCC+ and the senior unsecured debt to CC from CCC-. The 3 recovery rating (50%-70%; rounded estimate: 50%) on the senior secured debt and 6 recovery rating (rounded estimate: 0%) on the senior unsecured debt are unchanged.

“We have revised down sales volumes and margins for Wheel Pros, and given its constrained liquidity, it could pursue a debt structuring within the next 12 months. The company's operating performance deteriorated more than expected, with the company's wheel volumes having declined 24% in the third quarter fiscal 2022 compared to the same prior-year period, despite 10% MSRP reductions across two of its major truck wheel brands, resulting in base Wheel Pros' EBITDA declining $32 million year over year,” S&P said in a press release.

The agency said it forecasts a mid-single-digit decline in revenue for the base Wheel Pros business from a combination of lower volumes and prices as customers delay or cancel purchases.

The outlook is negative.

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