Moody's Rating Update
Moody's affirmed Holley Inc.'s corporate family rating at B2 and changed the outlook to stable from negative on Tuesday, as reported on 1 July 2026. The agency also affirmed the probability‑of‑default rating at B2‑PD, senior secured bank credit facility ratings at B2, and maintained the speculative‑grade liquidity rating at SGL‑2.
The outlook shift reflects Moody's expectation that Holley will sustain healthy profitability, keep financial leverage moderate, and generate solid free cash flow over the next 12‑18 months. Revenue is projected to grow in the low single‑digit range in 2026 and 2027, despite some attrition as the company exits lower‑margin and unprofitable businesses. After three consecutive years of modest revenue decline through 2024, Holley returned to growth of approximately 2% in 2025 and is expected to resume low‑single‑digit expansion thereafter.
Moody's forecasts an EBIT margin between 13.5% and 14.0% for the next 12‑18 months, driven by portfolio optimisation and the elimination of more than 11,000 stock‑keeping units. Debt‑to‑EBITDA is projected to be about 5.0× at the end of 2026, indicating moderate leverage.
On the liquidity front, the SGL‑2 rating signals expectations of good liquidity. Holley is anticipated to maintain an adequate cash balance while delivering positive free cash flow of at least $20 million in both 2026 and 2027. Liquidity is underpinned by a $100 million revolving credit facility that expires in 2029 and had $88 million of availability as of 29 March 2026.