Moody’s trims Masonite

Moody's Investors Service said it downgraded Masonite International Corp.'s senior unsecured notes to Ba2 from Ba1 but affirmed Masonite's Ba1 corporate family rating and Ba1-PD probability of default rating. The SGL-1 speculative grade liquidity rating is maintained.

“The downgrade of Masonite's senior unsecured note ratings by one notch reflects the changes in the company's capital structure in anticipation of its acquisition of Endura Products, a manufacturer of high-performance door system components,” the agency said in a press release.

Masonite plans to fund the $375 million purchase with a new, unrated $250 million delayed-draw first-lien term loan facility due 2027, borrowings under its $350 million ABL revolving credit facility, which was recently upsized from $250 million, and cash on hand.

“The introduction of new senior secured debt to the capital structure as well as the increased capacity of the ABL facility results in a higher loss absorption by the unsecured debt, and therefore is reflected in a lower rating,” Moody’s said.

The outlook is stable.

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