S&P Global Ratings downgraded Wabash National Corp. (NYSE: WNC) to an issuer rating of 'B-' from 'B' and lowered the issue-level rating on the company's senior unsecured notes to 'CCC+' from 'B-'. The rating action, announced on Thursday, came with a negative outlook.
The agency attributed the downgrade to weaker profitability and tighter liquidity as Wabash approaches several material debt maturities. S&P highlighted a $350 million asset-based lending (ABL) facility that matures in September 2027 and senior unsecured notes due in October 2028 as key refinancing pressures for the company.
At the end of the first quarter, the ABL was drawn to $100 million, with estimated remaining availability of roughly $100 million when taking covenant borrowing limits into account. S&P expects Wabash to report free operating cash flow deficits of $60 million to $70 million through 2026.
Demand trends in the company's core end markets are soft. S&P forecast trailer deliveries to decline to 25,000 to 26,000 units in 2026, down from 27,770 units in 2025. Truck body deliveries are expected to fall to 6,000 to 7,000 units in 2026, compared with 10,600 units in 2025. Reported EBITDA was negative in the first quarter, a result the agency linked to worsening truck body deliveries.
On margins, S&P expects its adjusted EBITDA margins for Wabash to be near break-even in 2026, with improvement to the mid-single-digit percent range anticipated in 2027. The agency also sees S&P Global Ratings-adjusted debt to EBITDA remaining elevated in 2026 before improving to an estimated 6x to 7x in 2027.
To manage the downturn, the company reduced inventory investments and extended payable terms to vendors through 2025 and into 2026. Despite the liquidity pressures, Wabash continued returning capital to shareholders via cash dividends that totaled about $3.5 million in the first quarter.
S&P projects total revenue for Wabash will decline 5% to 7% in 2026. The firm expects a sharper contraction within the transportation solutions segment, forecasting a 10% to 15% decline. Average sale prices are modeled at $38,000 to $40,000 for trailers and $28,000 to $30,000 for truck bodies in 2026. Those price levels are expected to be somewhat offset by parts and services revenue growth of 10% to 12% in the same year.
Context and implications
The combination of reduced end-market deliveries, near-term cash flow deficits and looming debt maturities forms the basis of S&P's negative outlook and the lower credit scores. The rating agency's projections indicate margin recovery is possible by 2027, but substantial refinancing and cash flow challenges are expected through next year.
Investors and counterparties will likely watch the company's cash flow performance, availability under the ABL and any actions Wabash takes to address upcoming maturities.