Moody’s lowers US LBM

Moody's Investors Service said it downgraded LBM Acquisition, LLC's (US LBM) corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD. The agency also trimmed the ratings on US LBM's senior secured first-lien term loan to B3 from B2, senior unsecured notes due 2029 to Caa2 from Caa1 and the rating on BCPE Ulysses Intermediate, Inc.'s (BCPE) senior unsecured PIK toggle notes due 2027 to Caa2 from Caa1. BCPE is a parent holding company of LBM Acquisition.

"Bain Capital continues to follow aggressive financial strategies, evidenced by a return of equity financed with borrowings under US LBM's revolving credit facility. A material reduction in liquidity in an environment of declining single-family home construction and economic uncertainty warrants the rating downgrade," according to Peter Doyle, a Moody's vice president and senior analyst, in a press release.

US LBM drew down on its revolver to pay Bain a $650 million dividend. Pro forma revolver availability on Sept. 30, is about $850 million versus $1.5 billion before the borrowings.

"Bain has now monetized its entire investment in US LBM, favoring its interests over debt holders," added Doyle.

The outlook remains stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.