Moody's upgrades Builders FirstSource

Moody's Investors Service said it upgraded Builders FirstSource, Inc.'s corporate family rating to B1 from B2 and probability of default rating to B1-PD from B2-PD.

Moody's also said it upgraded the company's senior secured term loan and senior secured notes to B2 (LGD 5) from B3 (LGD 5) and assigned a B2 (LGS 5) rating to the company's proposed $300 million senior secured notes due 2027.

These notes will rank pari passu to the company's other senior secured debt, the agency noted.

Moody's also said it affirmed the company's SGL-2 speculative grade liquidity rating.

The outlook is stable

The upgrades reflect an expectation that the company will continue to follow conservative financial policies and benefit from ongoing sound fundamentals in new housing construction that will result in strong operating results and improving credit metrics over the next 18 months, Moody's said.

The ratings reflect an expectation that the company will sustain strong credit metrics while maintaining conservative financial policies, the agency said.

The company derives about 71% of its revenue from single-family home builders, whose fundamentals remain sound and support growth, Moody's said.

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