S&P gives Specialty Building notes B-

S&P said it assigned a B- rating with a 4 recovery rating to Specialty Building Products Holdings LLC’s planned $575 million of senior unsecured notes due 2026.

Proceeds will be used to repay a term loan and pay an $81 million distribution to its owners.

“Over the last few quarters, we have seen strong demand trends in Specialty's two major end markets, new construction and repair and remodeling, which together account for over 90% of its revenues. While sales initially declined at the onset of the Covid-19 outbreak in April, there has been a steady recovery since,” S&P said in a press release.

S&P also revised the outlook to positive from negative and affirmed all the company’s ratings.

“The positive outlook on Specialty reflects the potential for a higher rating if favorable end-market demand leads to improvement in the company's performance, such that adjusted leverage will be about 6x or less and EBITDA interest coverage will be about 2x,” S&P said.

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