Moody’s eyes Masonite for downgrade

Moody's Investors Service said it placed Masonite International Corp.’s rating under review for downgrade, including the company's Ba1 corporate family rating, the Ba1-PD probability of default rating and the Ba2 backed senior unsecured notes ratings. Masonite's SGL-1 speculative grade liquidity rating remains unchanged. Previously, the outlook was stable.

On Monday, Masonite announced it plans to buy PGT Innovations, Inc. for about $3 billion in cash and stock.

Masonite intends to fund the cash portion of the acquisition with a combination of cash, borrowings under existing credit facilities and the proceeds from new debt and/or equity.

“Moody's anticipates that the transaction will lead to an increase in pro forma debt to EBITDA above 5x. The transaction is expected to close in the middle of 2024 and is subject to customary closing conditions including applicable regulatory approvals,” the agency said in a press release.

The review will consider “the strategic operating rationale and the trajectory and opportunities of the combined business over the next 12-18 months, Masonite's final capital structure, terms of the securities, and the company's ability to reduce debt to EBITDA below 3x on a sustainable basis following the acquisition, as well as its free cash flow generation capabilities and uses. Lastly, the review for downgrade will also assess Masonite's financial performance and the maintenance of solid credit metrics,” the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.