Moody’s rates Pisces Midco, facilities B2

Moody's Investors Service said it assigned a B2 corporate family rating to Pisces Midco, Inc., a new company comprised of Ply Gem Industries, Inc. and Atrium Corp.

Pisces will be owned roughly 67% by Clayton Dubilier & Rice, LLC and 33% by Golden Gate Capital and other Atrium shareholders.

In the same action, Moody's assigned a B2 to Pisces' $1,755,000,000 seven-year term loan B and a B2 to its estimated $125 million five-year secured cash flow revolver.

The outlook is stable.

Proceeds from the term loan B plus $425 million of CD&R cash equity and $213 million of Golden Gate and other Atrium shareholders' rolled equity will be used to finance in part the $2.92 billion combined purchase price of Ply Gem and Atrium and $119 million of prepayment penalties, fees and expenses.

Moody’s said the B2 corporate family rating reflects Pisces' elevated pro forma Moody's-adjusted debt leverage of 7.3 times as of Dec. 31, 2017, which, if not reduced in line with the company's projections, will make the B2 vulnerable to a downgrade.

In addition, the rating incorporates the volatility of raw material prices, especially PVC resin and aluminum, and the highly cyclical exterior building products markets that Pisces serves, the agency explained.

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