S&P rates Clay Holdco loans B, CCC+

S&P said it assigned preliminary B long-term issuer credit and preliminary issue ratings to Clay Holdco BV, the proposed €965 million first-lien term loan and the proposed €180 million revolving credit facility, as well as a preliminary CCC+ issue rating to the proposed €248 million second-lien term loan.

The outlook is stable.

Private equity firm Blackstone has announced that it will acquire Clay Holdco (also known as CRH Europe Distribution) from CRH plc (BBB+/stable/A-2) for a total consideration of €1.7 billion, and it will finance the deal through the issuance of term loans and equity.

Clay Holdco benefits from a large and dense network, leading positions in Western Europe, and exposure to end markets that are expected to continue expanding, albeit at a modest rate, S&P said.

However, the company is exposed to the very competitive and fragmented basic building materials and sanitary, heating and plumbing (SHAP) distribution markets, which have low barriers to entry and limited EBITDA margins, the agency added.

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