Research Update: Beacon Roofing Supply Inc. Outlook Revised To Positive; Ratings Affirmed, New Debt Rated

Beacon Roofing Supply Inc. (BECN) is reducing debt with the use of proceeds from its interiors business asset sale of $750mm in after tax proceeds. Results are robust for BECN on the back of strong tailwinds from residential construction and repair and remodel (R&R) sectors. Therefore, S&P Global Ratings revised its outlook to positive from stable and also affirmed its 'B+' issuer credit rating on BECN. At the same time, we assigned our 'BB-' issue-level and '2' recovery ratings on BECN's proposed $1 billion term loan B. Additionally, we are revising our rating on BECN's senior secured notes due 2026 to 'BB-' from 'BB', as well as revising our recovery rating to '2'. Finally, we assigned our 'B-' rating on

...- Beacon Roofing Supply Inc. (BECN) is reducing debt with the use of proceeds from its interiors business asset sale of $750mm in after tax proceeds. - Results are robust for BECN on the back of strong tailwinds from residential construction and repair and remodel (R&R) sectors. - Therefore, S&P Global Ratings revised its outlook to positive from stable and also affirmed its 'B+' issuer credit rating on BECN. At the same time, we assigned our '##-' issue-level and '2' recovery ratings on BECN's proposed $1 billion term loan B. Additionally, we are revising our rating on BECN's senior secured notes due 2026 to '##-' from '##', as well as revising our recovery rating to '2'. - Finally, we assigned our 'B-' rating on BECN's proposed $350 million senior unsecured notes due 2029. - The positive outlook indicates our view that adjusted leverage will remain lower than 5x with EBITDA interest coverage above 3x for the next 12 months on the back of steady demand for residential roofing products....

Research Update