Moody’s upgrades CPG

Moody’s Investors Service said it upgraded CPG International LLC’s (Azek Co. Inc.) corporate family rating to B1 from B3 and probability of default rating to B1-PD from B3-PD.

Moody’s also affirmed the B2 rating on the company’s first-lien senior secured term loan due May 2024. Finally, Moody’s assigned an SGL-2 speculative grade liquidity rating to Azek. The outlook remains stable.

The upgrade reflects the significant strengthening of Azek’s credit profile following its initial public offering that raised $817 million, which in turn was used to repay about $675 million of debt, the agency said.

Azek repaid the company’s $350 million of senior unsecured notes due 2025, the rating on which will be withdrawn, and about $326 million of its first-lien senior secured term loan, leaving a remaining balance of about $478.5 million.

“We expect that in the next 12 to 18 months Azek will operate with adjusted debt to EBITDA in the 3.5x to 4x range and EBITA to interest coverage of around 4x,” Moody’s said in a press release.

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