S&P rates Kodiak, loan B-

S&P said it assigned B- ratings to Kodiak Building Partners Inc. and its planned $540 million term loan due 2028. The loan’s recovery rating is 3. Kodiak is also seeking to increase its unrated asset-based lending facility to $200 million from $120 million.

The company will use the proceeds to refinance its debt, pay a $175 million dividend to its owners and pay related fees and expenses. Pro forma, S&P said it sees Kodiak’s leverage in the 4x-4.5x neighborhood.

“We expect increased demand for residential construction in 2021, which is a key end market for Kodiak. Kodiak generates about 80%-85% of its revenues from residential construction, which is benefiting from significant growth, especially for single-family dwellings, which account for 60% of its residential sales. In 2020, we expect organic revenue growth of 6%-7% due to higher new residential construction with 1.34 million starts up from 1.3 million in 2019,’ the agency said in a press release.

The agency assigned a positive outlook.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.