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Announcement: Moody's says American Trailer World's ratings unchanged following proposed senior secured term loan add-onGlobal Credit Research - 27 Jan 2022New York, January 27, 2022 -- Moody's Investors Service ("Moody's") said American Trailer World Corp.'s ("ATW") B3 corporate family rating (CFR), B3-PD probability of default rating and B3 senior secured term loan rating are unchanged following the company's announcement that it plans to issue a $250 million term loan, which is an add-on to the existing term loan due 2028. The outlook remains stable.Proceeds from the issuance will be used to fund a $225 million distribution to shareholders, repay $20 million in asset-based lending borrowings and fund transaction expenses. The transaction will modestly increase debt-to-LTM EBITDA to 5.2x from 4.4x on a pro forma basis at September 30, 2021.ATW's B3 CFR reflects the company's high financial leverage, which Moody's expects will be maintained at around 5x through 2022. Moody's expects the company will continue to generate positive free cash flow through 2022, benefiting from active industrial and construction end markets. However, a shift in consumer spending to services from durable goods as economies open up could temper top-line performance. A stronger than usual backlog provides some revenue visibility at least into 2022 and supports earnings growth.The rating also reflects the ongoing headwinds over the next 12 months in connection with inflationary pressures on both labor and raw material costs as well as the potential for supply chain disruption that could cause manufacturing delays. In addition, Moody's views recreational consumer demand as deferrable, especially during economic slowdowns. The company also operates in a fragmented industry and faces competitive pricing pressures, which has constrained organic margin expansion and contributed to a downward trend in ATW's margins in 2018 and 2019.ATW's $1.1 billion senior secured first lien term loan and $65 million revolving credit facility are rated B3, in line with the corporate family rating. This reflects the preponderance of this class of debt in the capital structure. The senior secured debt instruments rank behind a separate $155 million asset-based lending revolver, which has a first priority lien on the company's most liquid assets of eligible receivables, inventory and cash.American Trailer World Corp. (ATW), based in Addison, Texas, is a manufacturer of professional grade and consumer grade utility trailers and spare parts in North America. Revenue was approximately $1.9 billion for the LTM period ended September 30, 2021. The company is majority-owned by funds affiliated with Bain Capital.This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. Ron Neysmith Vice President - Senior Analyst Corporate Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Dean Diaz Associate Managing Director Corporate Finance Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 © 2022 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). 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