S&P rates Beacon loan BB-, notes B-

S&P said it gave Beacon Roofing Supply Inc.’s planned $1 billion term loan BB- issue and 2 recovery ratings and a B- rating to its proposed $350 million of senior secured notes due 2029. Additionally, the agency upgraded Beacon’s senior secured notes due 2026 to BB- from BB and revised the recovery rating to 2.

“We expect BECN's adjusted leverage to be lower than 5x over the next 12 months, supported by recent deleveraging and strong business tailwinds. We believe the company's divestiture signals an important transition for the company as it refocuses the enterprise, improves its financial flexibility, and enhances its balance sheet. Beacon sold its interior products business to Foundation Building Materials Inc. for $750 million in after-tax proceeds, which it used to repay debt,” S&P said in a press release.

The agency also affirmed Beacon’s B+ issuer rating.

The outlook is positive.

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