Moody’s rates American Builders loan B1

Moody's Investors Service said it assigned a B1 rating to American Builders & Contractors Supply Co., Inc.'s proposed $1,875,000,000 senior secured term loan B due 2023.

With the exception of maturity date, the proposed term loan will have substantially similar terms and condition as the existing term loan.

Proceeds from the new term will be used to facilitate the acquisition of L&W Supply Corp. from USG Corp. for $670 million, to reduce revolver borrowings, to pay off the existing $972 million senior secured term loan due 2020, at which the time the rating will be withdrawn, to distribute a $150 million dividend for estate tax purposes, and to pay related fees and expenses.

In related actions, Moody's affirmed the company’s B1 corporate family rating, B1-PD probability of default rating and the B3 rating assigned to its unsecured debt.

The outlook remains stable.

Moody’s said the B1 rating assigned to the $1,875,000,000 senior secured term loan, the same rating as the corporate family rating, represents the preponderance of debt in the company's capital structure. It is secured by a first-lien on all of American Builders’ long-term assets and a second-lien on the assets securing the revolving credit facility. The term loan benefits from its priority of payment relative to $850 million in more junior capital.

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