Moody's rates Gypsum loans B3, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to GYP Holdings III Corp., the direct holding company of Gypsum Management and Supply, Inc.

The agency also assigned a B3 rating to the company's proposed $390 million senior secured term loan due 2021 and a Caa2 rating to its proposed $160 million second-lien senior secured term loan due 2022.

Moody's said the B3 rating assigned to the $390 million senior secured term loan due 2021, the same rating as the corporate family rating, results from it comprising the majority of debt in GMS' capital structure, as well as the collateral securing this credit facility. It has a first lien on substantially all of GMS' long-term assets, and a second lien on the assets securing the revolving credit facility.

The Caa2 rating assigned to the $160 million second-lien senior secured term loan due 2022, two notches below the corporate family rating, results from its position as the most junior debt in GMS' capital structure, putting it in a first-loss position in a recovery scenario.

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