Moody's lifts 84 Lumber

Moody's Investors Service said it upgraded 84 Lumber Co.'s corporate family rating to Ba2 from B1, probability of default rating to Ba2-PD from B1-PD and the rating on 84 Lumber's senior secured term loan maturing 2026 to Ba3 from B2. The outlook is changed to stable from positive.

“The upgrade of 84 Lumber's CFR to Ba2 from B1 reflects Moody's expectation that 84 Lumber will continue to perform well, generating solid margins and cash flow. Moody's forecasts good operating performance, with EBITDA margin sustained in the range of 9% -11% through 2023. Good profitability will translate into low leverage, remaining at 1x through 2023. The ability to generate free cash flow prior to discretionary dividends further supports the rating upgrade,” the agency said in a press release.

The stable outlook reflects an expectation that 84 Lumber will continue to benefit from the ongoing demand in the U.S. residential construction market, Moody’s said.

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