Research Update: American Builders&Contractors Supply Co. Inc. 'BB' Rating Affirmed; New Debt Rated; Outlook Stable

Exterior and interior build products distributor American Builders&Contractors Supply Co. Inc. (ABC Supply) is issuing $800 million of new senior unsecured notes to redeem its existing senior notes due in 2021 ($200 million outstanding balance). We are affirming our 'BB' corporate credit rating on ABC Supply based on our expectation that the company will maintain its current prudent financial policies even while pursuing a moderate level of debt financed bolt-on acquisitions. We are assigning our 'B+' issue-level rating and '6' recovery rating to the company's proposed $800 million senior unsecured notes due in 2026. Our 'BB+' issue-level rating on the company's senior secured $1.875 billion term loan and 'B+' $350 million senior unsecured notes are being affirmed. The

...+ Exterior and interior build products distributor American Builders & Contractors Supply Co. Inc. (ABC Supply) is issuing $800 million of new senior unsecured notes to redeem its existing senior notes due in 2021 ($200 million outstanding balance). + We are affirming our '##' corporate credit rating on ABC Supply based on our expectation that the company will maintain its current prudent financial policies even while pursuing a moderate level of debt financed bolt-on acquisitions. + We are assigning our 'B+' issue-level rating and '6' recovery rating to the company's proposed $800 million senior unsecured notes due in 2026. + Our '##+' issue-level rating on the company's senior secured $1.875 billion term loan and 'B+' $350 million senior unsecured notes are being affirmed. + The stable outlook reflects our expectation that over the next 12 months the company will continue to generate positive free cash flow and maintain total leverage of 3.25-3.75x....

Research Update