Moody's assigns B2 to Cornerstone term loan

Moody's Ratings said it changed the outlook of Cornerstone Building Brands, Inc. to negative from stable.

Moody's also affirmed Cornerstone's B2 corporate family rating, B2-PD probability of default rating, B2 senior secured credit facility rating, B2 senior secured notes rating and the Caa1 senior unsecured notes rating.

Concurrently, Moody's assigned a B2 rating to Cornerstone's proposed $500 million senior secured term loan B.

The new $500 million term loan will be used to repay outstanding borrowings on the company’s ABL facility (unrated), which was drawn in the second quarter to finance the acquisition of Harvey Building Products Corp.

“The outlook change reflects our expectation of increased leverage and continued weak interest coverage through the end of 2024 as a result of lower volumes within the company’s Apertures and Shelter segments,” said Griselda Bisono, Moody’s vice president – senior analyst, in a news release.

Moody’s expects adjusted debt to EBITDA will rise to 5.7x and adjusted EBITA to interest expense will remain around 1.0x by year-end 2024.

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