Moody’s rates BCPE notes Caa2

Moody’s Investors Service said it assigned a Caa2 rating to BCPE Ulysses Intermediate, Inc.’s proposed $400 million of senior unsecured payment-in-kind toggle notes due 2027.

Proceeds will be used to fund a dividend to shareholders.

In a related action, the agency downgraded BCPE’s subsidiary LBM Acquisition, LLC’s (US LBM) corporate family rating to B3 from B2 and the probability of default rating to B3-PD from B2-PD. Moody’s also affirmed the B2 ratings on its senior secured term loans and lowered the senior unsecured notes due 2029 to Caa2 from Caa1.

“Bain Capital’s aggressive financial strategy, evidenced by a return of equity through an increase in leverage so soon after acquiring US LBM, and the resulting deterioration in key credit metrics warrants the rating downgrade,” according to Peter Doyle, a Moody’s vice president and senior analyst, in a press release.

The outlook for both companies is stable.

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