Moody’s Investors Service has downgraded the ratings of Camping World, including the corporate family rating to B3, the probability of default rating to B3-PD, and the senior secured bank credit facility to B3. The outlook is negative, Moody's reported.
“Today’s rating action reflects the potential for ongoing softness in the RV market as consumers sort through how the effects of the coronavirus will impact their big-ticket purchases during 2020,” said Moody’s Vice President Charlie O’Shea. “While the culling of the Gander stores is largely complete and Camping World is undertaking significant mitigation measures during Q4 2019, risks remain given the discretionary nature of the remaining product line. … That said, liquidity remains adequate, with around $140 million in cash at FYE December 2019 and significant unencumbered vehicle inventory that is fungible.”
“Camping World’s B3 rating considers its weak quantitative credit profile due to the pruning of the Gander Mountain store network, with over half of the acquired stores now closed and soft industry fundamentals that will be exacerbated by the effects of the coronavirus on consumers, especially as they consider large, discretionary purchases,” stated Moody’s Investors Service.