On December 22, 2020, Moody's Investors Service upgraded its corporate family rating on NAPA Management Services Corporation to Caa1 from Caa2, its probability of default rating to Caa1-PD/LD from Caa2-PD and its senior secured first lien debt rating to B3 from Caa1. The upgrade reflects that the Company's leverage and liquidity have improved due to a combination of improved business volumes, sponsor equity injection, an extension of revolver maturity and the flexibility provided by the amendment to the second lien term loan agreement, according to the ratings agency.

The rating reflects the Company's very high leverage, challenging business environment and weak free cash flow. Moody's estimates that the Company's debt/EBITDA will remain above 7.5 times even if the business volumes remain at a level comparable to the recent months. The rating also reflects the Company's limited scale and high geographic concentration in northeastern states, Moody’s states.

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