S&P ups Builders FirstSource

S&P said it upgraded Builders FirstSource Inc.’s issuer rating to BB from BB-, its senior secured notes to BBB- from BB+ and its senior unsecured notes BB- from B+. The agency also rated the company’s planned $800 million of senior unsecured notes due 2032 BB-.

“BFS' strong earnings and cash generation are underpinned by robust residential construction demand. We expect BFS to generate adjusted EBITDA of $1.2 billion-$1.3 billion over 2021. We believe strong demand for new homes will continue for at least the next 12 months, based on our expectations of 1.5 million-1.6 million housing starts over 2021-2022. This will drive solid sales growth, further helped by strong demand from repair and remodeling end markets,” S&P said in a press release.

BFS plans to use the proceeds to repay asset-based lending borrowings and fund acquisitions.

The outlook is stable.

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