S&P rates Quikrete loan BB-

S&P said it affirmed its BB- corporate credit rating on Quikrete Holdings Inc. The outlook is stable.

At the same time, S&P assigned a BB- issue-level rating and 4 recovery rating to the company's proposed $2.25 billion seven-year senior secured term loan. The 4 recovery rating indicates an expectation for average (30%-50%; upper half of the range) recovery in the event of a payment default.

Quikrete will use the term loan proceeds, along with $100 million of cash, to fund its acquisition of Contech and retire $1.3 billion of existing debt. As part of the transaction, Quikrete will refinance its existing $225 million ABL facility with a new five-year $325 million ABL facility, the agency said.

“The stable outlook reflects our expectation that Quikrete will successfully integrate Contech's operations and deliver steady growth in EBITDA over the next 12 months as repair and remodeling, residential construction, and infrastructure spending remains robust,” said S&P credit analyst Ryan Gilmore in a news release.

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