S&P trims LSF9 Cypress loan to B

S&P said it lowered its issue-level rating on LSF9 Cypress Holdings LLC’s (Foundation Building Materials) first-lien term loan to B from B+ following the company’s announcement of an increase in the size of the loan.

The downgrade is in conjunction with S&P’s revision of the recovery rating on the first-lien term loan to 3 from 2. The issue-level and recovery ratings on the second-lien term loan and corporate credit rating are unchanged.

S&P said it has revised the recovery analysis to account for the increase in the term loan and had also adjusted its estimated enterprise valuation of the company to reflect recent acquisitions. Under the revised recovery analysis, S&P estimates recovery on the term loan would be at the higher end of the 50%-70% range, resulting in a recovery rating of 3.

The B corporate credit rating on the company reflects a weak business risk profile and a highly leveraged financial risk profile, the agency said in a news release.

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