GMS Inc. intends to upsize its asset-based lending (ABL) facility to $950 million from $545 million while extending the maturity to 2027. While we believe increased liquidity, particularly amid worsening operating conditions, improves overall credit quality, the significant increase in priority claims reduces recovery prospects for the senior secured debt. We revised our recovery rating on the company's $504 million senior secured term loan due in 2025 to '3' from '2' and lowered our issue-level rating to 'BB-' from 'BB'. At the same time, we affirmed our 'BB-' issuer credit rating and 'B' issue-level ratings on the unsecured notes. The recovery rating on the unsecured notes remains '6'. The stable outlook indicates our expectation of adjusted leverage sustained at 3x-4x,
