S&P Global Ratings downgraded the debt ratings of Wahoo Fitness after the U.S.-based fitness technology company entered into a forbearance agreement with a term loan and revolving credit facility lenders in anticipation of missing principal and interest payments due March 31, 2023. As a result, S&P lowered its issuer credit rating on Wahoo to ‘D’ from ‘CCC-‘.
Concurrently, S&P lowered the issue-level rating on Wahoo’s senior secured credit facilities to ‘D’ from ‘CCC’. The ‘2’ recovery rating is unchanged, indicating our expectation for substantial (70 percent to 90 percent; rounded estimate 70 percent) recovery.
S&P said, “The downgrade reflects Wahoo’s announcement that it executed a forbearance agreement on its debt service payments, both principal and interest, due March 31, 2023, with respect to its term loan and revolving credit facility. In our view, this represents a default on the term loan and revolving credit facility because Wahoo will not meet its contractual obligation to pay principal and interest in a timely manner. As of January 31, 2023, Wahoo had fully drawn its $30 million revolver and had $5.9 million cash on hand. Subsequent to the downgrades, we withdrew all our ratings on Wahoo at the company’s request.”
