Moody’s Investors Service upgraded the ratings of Camping World, including its Corporate Family rating, which was upgraded to B1. The outlook is stable.

“Today’s rating action reflects the continuing strength in Camping World’s operating performance as strong RV demand fuels sales of both new and used vehicles and increasing levels of operating income,” stated Moody’s Vice President Charlie O’Shea. “Positive impact on key credit metrics include debt/EBITDA approaching 3.5 times and interest coverage approaching 4 times, both of which are well inside the upgrade triggers,” continued O’Shea. “Liquidity remains good, with cash and equivalents of $438 million and floorplan offset availability of $104 million at Q3 end, and Moody’s expects these favorable trends in operating performance to continue into 2021.”

Upgrades

  • Probability of Default Rating, Upgraded to B1-PD from B2-PD
  • Corporate Family Rating, Upgraded to B1 from B2
  • Senior Secured Bank Credit Facility, Upgraded to B1 (LGD3) from B2 (LGD4)

Outlook Actions

  • Outlook, Remains Stable

Ratings Rationale
Camping World’s B1 rating considers its improved quantitative credit profile, industry fundamentals that rebounded quickly from pandemic-related softness, its leading market position within the recreational vehicle segment, its flexible business model that provides multiple sources of revenue, with retail sales, membership sales, and parts and accessories through its dealership and retail networks, as well as the risks inherent in its acquisition-based growth strategy. Liquidity at September 30, 2020 is good with cash and equivalents of $483 million and floorplan offset of $104 million, with meaningful maturities long-dated.

The stable outlook reflects Moody’s view that the company has flexibility surrounding its mix between new and used vehicles, as well as the fairly predictable profit streams from Good Sam, and a variable cost structure that can flex such that it can limit the potential downside that could result from a potentially lingering demand “shock.”

Photo courtesy Camping World