KBRA Assigns Ratings to Nowcom, LLC

NEW YORK--(BUSINESS WIRE)--KBRA assigns an issuer rating of BBB- and senior secured debt rating of BBB- to Los Angeles, California-based Nowcom, LLC ("Nowcom" or "the company"). KBRA also assigns BBB- ratings to the company's $100 million senior secured notes due in July 2031. The Outlook for the ratings is Positive.

Key Credit Considerations

Nowcom is a leading provider of software and technology solutions to the U.S. independent auto dealer industry and its DealerCenter platform is used by 20,000+ dealers nationwide. Proprietary solutions include deal management, customer relationship management, inventory management, credit and compliance management, website hosting, portfolio management, and accounting. Additionally, Nowcom’s 50+ integration and partnership relationships with third-party technology and data providers allows it to distribute additional solutions for a small fee. The company has operated since 1996 and generated ~$255 million in sales revenue in 2025. Nowcom also provides technology services directly to parent Nowlake Technology, LLC ("Nowlake"), affiliate Westlake Services, LLC ("Westlake"), and other affiliated companies, including software development, IT infrastructure management, call center support, and information security services. Intercompany revenues contribute a meaningful portion of overall earnings, historically ~50%.

Ownership by investment grade rated parent Nowlake (KBRA Issuer Rating BBB- / Positive Outlook) underpins Nowcom’s ratings. Nowcom is a core operating subsidiary of Nowlake and its strategy, operations, revenues, and financial management are highly integrated with that of its parent and affiliate Westlake. Furthermore, Nowcom’s solutions strengthen the broader Nowlake/Westlake value proposition to independent auto dealer clients.

Nowcom is highly profitable, generating an average EBITDA margin of ~44% from FY2022 through 9M25 while growing revenues by ~60% and net income by ~70% over the same period. Customer revenues are largely contracted month-to-month but have displayed solid durability over time, in part, due to the company’s value-led pricing strategy which supports long-term loyalty and retention, with monetization driven by lifetime value across the Nowlake platform rather than up-front margins.

Capitalization is strong, indicated by debt-to-EBITDA leverage <1x and a TCE ratio of ~50% as of 9M25. The company’s debt comprises $100 million of senior secured notes issued in 2023 and due in 2031.

Assets are largely intercompany receivables (~60% of assets) – including $145 million in notes due from Nowlake – and cash (~20%). As such, traditional credit sensitive asset quality metrics are not applicable.

Notwithstanding the strong market position, diverse geographic footprint and seasoned management team of both Nowcom and Westlake, the highly competitive auto finance industry remains historically prone to select periods where pricing and / or credit performance volatility can challenge industry returns. In this regard, Nowcom’s credit strengths are counterbalanced, in part, by the inherent risks associated with its customer base, both directly and through the broader Nowlake platform.

Rating Sensitivities

Nowcom's ratings remain closely tied to those of parent Nowlake and affiliate Westlake, which are sensitive to indirect auto lending asset quality performance. A change in Nowcom's ratings, either upgrade or downgrade, would most likely to be driven by a change in the ratings of Nowlake and/or Westlake.

To access ratings and relevant documents, click here.

Related Publication

• KBRA Affirms Issuer Ratings for Westlake Services, LLC and Parent, Nowlake Technology, LLC

Methodologies

• Financial Institutions: Finance Company Global Rating Methodology
• Corporates & Financial Institutions: Corporate Instruments / Corporate-Linked Obligations Notching Global Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1012954