S&P rates Ply Gem loan B+, notes CCC+

Standard & Poor's said it affirmed its B corporate credit rating on Ply Gem Industries Inc.

At the same time, S&P assigned a B+ issue-level rating (one notch above the corporate credit rating) to the proposed $380 senior secured term loan with a recovery rating of 2, indicating that lenders can expect meaningful recovery (70%-90%) in the event of a default.

S&P also assigned a CCC+ rating (two notches below the corporate credit rating) to the proposed senior unsecured notes, with a recovery rating of 6, indicating that investors can expect negligible recovery (0% to 10%) in the event of a default.

"The stable outlook reflects our expectation that while Ply Gem is likely to generate higher levels of EBITDA in 2014, we expect credit measures to remain in the highly leveraged category, with debt to EBITDA leverage of about 6x and interest coverage of about 2.3x," said S&P credit analyst Thomas Nadramia in a news release. "Also, given the company's private equity ownership, we expect the company to remain 'highly leveraged' over the next 12 months."

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