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

Standard & Poor’s said it assigned a BB- corporate credit rating to Beacon Roofing Supply Inc., along with BB+ rating to its proposed $450 million term loan due 2022 and B+ rating to its proposed $300 million senior unsecured notes due 2023.

The recovery rating on the term loan is 1, indicating 90% to 100% expected default recovery. The recovery rating on the senior unsecured notes is 5, indicating 10% to 30% expected default recovery.

The outlook is stable.

The stable outlook reflects an expectation that Beacon will continue to exhibit credit measures commensurate with an aggressive financial risk profile with debt-to-EBITDA ratio of between 3.5x and 5x, S&P said.

The stable outlook further reflects a belief that Beacon will maintain adequate liquidity over the next 12 months, the agency said.

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