Moody’s gives B1 to Forterra loan

Moody's Investors Service said it assigned a B1 rating to Forterra Finance, LLC's proposed $200 million incremental first-lien term loan due October 2023.

The incremental term loan will be used to repay the currently drawn portion of Forterra's asset-based loan. As part of this transaction, Forterra will also reprice its existing $1.05 billion senior-lien term loan. All other terms and conditions on the first-lien term loan will be unchanged.

Moody's said it views the proposed $200 million incremental first-lien term loan and the associated repricing of the existing $1.05 billion senior-lien term loan as credit neutral.

“Although the company's debt leverage is currently elevated for its rating category and this transaction decreases the likelihood Forterra will reduce balance sheet debt, Moody's still expects Forterra to deleverage during the next 12 to 18 months as the company continues to benefit from an expanded revenue base and higher margins,” the agency said in a news release.

“We expect Forterra to perform well during our time horizon with sales growth within the single low-to-mid range by FYE 2017 while maintaining gross margins above 18%.”

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