(Editor’s be aware: an earlier reference to sure monetary obligations has been faraway from this model of the article. Velocity Automobiles now not has these obligations. An outline of Cranemere’s enterprise mannequin additionally has been up to date).
Velocity Automobiles, a nationwide supplier of truck gross sales and repair, had its debt score minimize two notches by Moody’s final week, a larger-than-usual discount just a few months after an identical two-step discount by a competing company.
Whereas a minimize of two notches at one time will not be unprecedented, it’s typically an indication of quickly weakening funds.
The brand new score of B3 from Moody’s is taken into account equal to a B- score from S&P World Rankings. S&P World has had that score on Velocity Automobiles since December, when like Moody’s it lowered its score by two notches in a single particular person motion.
Each scores are six notches lower than the cutoff that marks investment-grade debt from non-investment grade debt.
Moody’s affirmed its Ba3 debt score on Velocity Automobiles in October 2024. However it did so whereas altering the corporate’s outlook to unfavorable from secure, typically a precursor to a scores discount.
The next discount got here in Might 2025, when the brand new score on the corporate was set at B1, down one notch from Ba3. With the transfer introduced final week, the scorecard is that Velocity Automobiles has seen its debt score downgraded three notches in lower than one 12 months at Moody’s.
An identical however considerably observe occurred with S&P. Velocity Automobiles was first assigned a BB- score from S&P World Rankings in Might 2024. That was minimize to B+ in June 2025, after which lowered two notches to B- in December.
“The downgrade displays Velocity Automobiles’ weaker than anticipated working efficiency and earnings that has resulted in a cloth deterioration in credit score metrics,” Moody’s stated in its report.
Velocity Automobiles is majority owned by Cranemere, which describes itself as “is a long run industrial holding firm.” Its different trucking-focused firm in its portfolio is Crossroads Gear Lease and Finance.
In a ready assertion provided to BigRig, Velocity Automobiles stated of the latest adjustments, “Because the credit score businesses have famous, Velocity Automobiles has a robust liquidity place with ample money stream.” The assertion additionally notes that Velocity Automobiles has no credit score maturities earlier than September 2029. It added that Velocity Automobiles is “effectively positioned to profit from an anticipated restoration within the business.”
Income is disclosed
Whereas the debt scores stories of the scores businesses hardly ever disclose profitability info, they do often disclose income figures. Moody’s stated for the 12 months ending September 30, Velocity Automobiles income was about $3.57 billion.
As a degree of distinction, publicly-traded Rush Enterprises (NASDAQ: RUSHA), which additionally has a community of truck dealerships, closed 2025 with income of $7.4 billion.
On the Cranemere website, Velocity Automobiles is described as having 78 areas worldwide for dealerships and leasing. It was based in 1998 and has been a part of Cranemere’s portfolio since 2019.
The Moody’s report was additionally not directly vital of Cranemere. It stated the decrease debt score additionally was pushed by “governance concerns, significantly Velocity Automobile’s majority non-public possession beneath associates of..Cranemere..moderated partially by materials minority possession by founders and administration.”
One debt collection rated decrease
The B3 company household score doesn’t apply throughout the board. Moody’s rated Velocity Automobiles’ senior unsecured notes at Caa2, which is 2 notches lower than the B3 company score. These notes complete $500 million however are additionally “junior” to the corporate’s secured debt. The dimensions of that secured debt was described by Moody’s as “vital.”
Moody’s stated the brand new B3 company score is a mirrored image of the corporate’s “weak credit score metrics,” with a debt/EBITDA ratio of seven.6X.
Moody’s didn’t specify that the ratio was “lease-adjusted.” However in different latest scores actions, Moody’s in Might 2025 stated the lease-adjusted debt/EBITDA ratio was about 6.4X. Within the December report from S&P World, that company stated Velocity Automobiles had seen its lease-adjusted leverage “rising above 7x.”
Though each S&P Rankings and Moody’s now have Velocity Automobiles on the identical equal debt score, the December report of S&P World had a extra unfavorable tone.
“We consider Velocity Automobiles’ liquidity place has weakened to lower than ample, primarily pushed by lowered funds from operations ensuing from decrease earnings, the absence of a dedicated revolving credit score facility (and) near-term revolver maturities,” S&P stated.
S&P in December stated Velocity Automobiles is anticipated to stay money flow-positive “regardless of ongoing operational challenges.”
“We consider these components will assist help the corporate’s refinancing,” the S&P report stated. “Nevertheless, if we don’t anticipate the corporate to make materials progress in refinancing its maturities, we might decrease the scores additional. “
Not like the latest Moody’s change to a secure outlook, S&P World Rankings has a unfavorable outlook for Velocity Automobiles.
“The secure outlook displays an expectation that credit score metrics is not going to materials deteriorate from present ranges and liquidity will stay ample in addition to the absence of any close to time period debt maturities,” Moody’s stated.
There have been different positives within the S&P report from December.
“We proceed to anticipate the corporate to generate constructive free working money stream (FOCF) of roughly $18 million in 2025,” S&P stated. “We consider reported FOCF will enhance to above $40 million in 2026, supported by forecasted profitability enhancements.”
Moreover its heavy debt load, Moody’s additionally cited the state of the truck market as driving its downgrade.
“The weak point in working efficiency is essentially the results of a persistent softness in freight transportation volumes pushed partially by the imposition of tariffs which have resulted in cautious method in replace of trucking fleets,” Moody’s stated. “We anticipate demand for brand new, used, and leased and rental (L&R) vans in addition to upkeep companies to stay beneath stress in 2026 and in consequence anticipate Velocity Automobiles credit score metrics to stay weak.”
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The submit Velocity Automobiles debt score slashed for 2nd time in 3 months appeared first on BigRig.