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Alliance laundry systems stock price9/8/2023 ![]() ![]() These risks are partially mitigated by management's commitment to reduce leverage and the company's consistent free cash generation from a high level of reoccurring revenue in the non-cyclical laundry equipment manufacturing market.Moody's expects Alliance to maintain a good liquidity profile over the next 12 to 18 months including a $125 million undrawn revolving credit facility.Please see for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.This publication does not announce a credit rating action. Although unlikely given the company's elevated leverage, Alliance's owners may choose to take on a material amount of additional leverage to pursue more aggressive inorganic growth opportunities or upstream further dividends to existing shareholders. The company's focus is expected to be on reducing leverage and Moody's expects free cash to be directed toward debt reduction and bolt on acquisitions.Governance risks we consider in Alliance's credit profile include an aggressive financial policy. Furthermore, the amount of debt to be refinanced in 2027 has increased, resulting in additional pressure to improve operations and reduce debt beforehand.Alliance's B2 Corporate Family Rating reflects the company's scale in the fragmented laundry equipment manufacturing market, high EBITDA margins, reoccurring revenue opportunities from its large installed and diverse customer base, and the non-cyclical nature of the laundry equipment business. ![]() While this transaction cleans up future repayment obligations, Moody's views it as a credit negative since we expect 2021 debt to EBITDA to remain near 7.0x, which opposes our original forecast of debt reduction. The proceeds of the add-on will used in conjunction with available cash to repurchase $94 million of mandatory redemption preferred stock due Dec 2029 held by sponsor owner, BDT Capital Partners. Announcement: Moody's says Alliance Laundry Systems' ratings unchanged after $75 million add-on to first lien term loanGlobal Credit Research - New York, Febru- Moody's Investors Service ("Moody's") said Alliance Laundry Systems LLC ("Alliance") B2 Corporate Family Rating (CFR), B2-PD Probability of Default Rating, and B2 first lien term loan rating are unchanged following the announcement of a $75 million add-on to the company's first lien term loan maturing in 2027. ![]()
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