Moody's ups Building Materials notes, rates notes Ba3

Moody's Investors Service said it assigned a Ba3 (LGD4, 50%) to Building Materials Corp. of America's proposed $1 billion of senior notes due 2021 and affirmed its Ba3 corporate family and probability of default ratings.

The outlook is stable.

Proceeds from the notes issuance will be used to make a $500 million dividend to G-I Holdings Inc., Building Materials' indirect parent holding company, to repay the company's existing term loan due 2014 and to pay interest rate swap termination fees and other expenses. I

Moody's upgraded the company's existing $250 million of senior secured notes due 2020 to Ba1 (LGD2, 16%) from Ba2 (LGD3, 33%) and its $450 million of senior notes due 2018 and $325 million of senior notes due 2020 to Ba3 (LGD4, 50%) from B1 (LGD5, 73%).

The ratings consider the company's strong market position in the roofing repair and remodeling sector and expectations that the company will continue to generate strong operating performance resulting from stable demand for roofing repair, the agency said.

The ratings also consider its business profile with predominately reliance on a single line of business with minimum international exposure as well as the company's negative tangible net worth and high debt-to-book capitalization ratio, the agency added.

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