S&P rates Tamko Building loan BB-

S&P said it assigned a preliminary BB- issuer credit rating to Tamko Building Products, along with a preliminary BB- rating and 3 recovery rating to the company's proposed term loan.

Carlyle Global Partners is acquiring a 25% stake in Tamko.

The company intends to issue a $600 million first-lien term loan due 2026 to recapitalize the business, as well as fund a distribution to the existing shareholders.

Pro forma for the transaction, debt-to-EBITDA leverage will be about 4x.

The ratings reflect the company's small size and relative market position within the consolidated U.S. roofing materials market, pro forma debt-to-EBITDA ratio of about 4x and lower than peer average EBITDA margin, the agency said.

The ratings also consider its narrow product profile that is focused predominantly on asphalt-based roofing shingles and related products.

The stable outlook reflects an expectation of low-single-digit revenue growth and stable EBITDA margins, enabling Tamko to maintain debt leverage within the 4 to 4.5x range, S&P said.

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