Moody’s gives White Cap notes Caa1

Moody’s Investors Service said it gave a Caa1 rating to White Cap Parent, LLC’s planned $300 million of senior unsecured payment-in-kind toggle notes due 2026. White Cap Parent is the parent holding company of White Cap Supply Holdings, LLC.

Moody’s also affirmed White Cap Supply’s B2 corporate family rating and B2-PD probability of default rating. The agency also affirmed the B2 ratings on the company’s senior secured revolving credit facility and term loan and the Caa1 rating on the senior unsecured notes due 2028.

Moody’s said it revised White Cap Supply’s outlook to negative from stable, reflecting the aggressive financial strategy pursued by Clayton, Dubilier & Rice (CD&R), which owns 65% of White Cap.

“The Caa1 rating assigned to White Cap Parent, LLC’s senior unsecured PIK toggle notes due 2026, two notches below the corporate family rating, results from their structural and contractual subordination to White Cap Supply Holdings, LLC’s funded debt of approximately $3 billion and committed cash flow and asset-based revolving credit facilities with $750 million of capacity,” the agency said in a press release.

Proceeds will be used to fund a dividend to shareholders.

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