Moody’s rates Standard Industries notes Ba2

Moody's Investors Service said it confirmed Standard Industries Inc.'s (formerly Building Materials Corp. of America) Ba2 corporate family rating and Ba2-PD probability of default rating following the company's previous announcement that it is acquiring Icopal A/S.

In related actions, the agency confirmed the Ba2 rating assigned to Standard's unsecured notes and assigned a Ba2 to its proposed $650 million senior unsecured notes.

Proceeds from the proposed debt issuance along with cash on hand will be used for the acquisition of Icopal.

The outlook is stable. This completes the review initiated on Jan. 25.

Standard is acquiring Icopal, a pan-European manufacturer of roofing and other waterproofing products with about revenues of €1 billion ($1.1 billion), from Investcorp Ltd. for about €1 billion. On a pro forma basis, the combined company will have about $4 billion in sales, market exposure to Europe, and access to new products.

The Ba2 corporate family rating remains appropriate at this time due to Standard's robust liquidity profile, characterized by cash on hand and revolver availability, aggregating to about $1 billion at seasonal low point. The company is committed to maintaining substantial liquidity at all times.

Moody's said it expects Standard to maintain strong operating margins, despite Icopal generating lower margins than Standard.

The acquisition of Icopal boosts Standard's already-strong market position in both the U.S. and European roofing repair sectors, which both offer stable demand within the remodeling space.

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