Research Update: SiteOne Landscape Supply Inc. Upgraded To 'BB' On Debt Reduction; Outlook Stable; Term Loan Rating Raised To 'BB+'

SiteOne has cut its debt burden in half by using proceeds from the equity offering in August 2020 to pay down debt during the second half of the year, which has lowered adjusted leverage to 1.6x (as of Dec. 31, 2020) from 3x a year ago. We believe this substantial deleveraging demonstrates the company's commitment toward operating at lower target leverage thresholds. Therefore, we are raising our issuer credit rating on SiteOne to 'BB' from 'BB-'. Concurrent with this, we are raising our rating on the company's first-lien term loan to 'BB+' from 'BB'. The stable outlook indicates our view that we expect adjusted leverage to be in the 2x-3x range, backed by the company's ability to grow revenues while

...- SiteOne has cut its debt burden in half by using proceeds from the equity offering in August 2020 to pay down debt during the second half of the year, which has lowered adjusted leverage to 1.6x (as of Dec. 31, 2020) from 3x a year ago. - We believe this substantial deleveraging demonstrates the company's commitment toward operating at lower target leverage thresholds. - Therefore, we are raising our issuer credit rating on SiteOne to '##' from '##-'. Concurrent with this, we are raising our rating on the company's first-lien term loan to '##+' from '##'. - The stable outlook indicates our view that we expect adjusted leverage to be in the 2x-3x range, backed by the company's ability to grow revenues while maintaining EBITDA margins of 10%-11%...

Research Update