S&P rates Gypsum loans B, CCC+

Standard & Poor's said it assigned a preliminary B corporate credit rating to Gypsum Management & Supply Inc.

The agency also said it assigned a preliminary B rating and preliminary 4 recovery rating to GYP Holdings III Corp.'s proposed $390 million first-lien term loan. The rating is the same as the company's corporate credit rating. The preliminary 4 recovery rating on the term loan indicates 30% to 50% expected default recovery.

S&P said it assigned a preliminary CCC+ rating and preliminary 6 recovery rating to GYP Holdings III's proposed $160 million second-lien term loan. The preliminary 6 recovery rating on the term loan indicates 0% to 10% expected default recovery.

The outlook is stable.

The stable outlook reflects an expectation that Gypsum's forecasted 2014 to 2015 leverage will be higher than 5x, which is commensurate with a highly leveraged financial risk profile, said Maurice Austin, an S&P analyst.

"The outlook also reflects an expectation that liquidity will remain adequate to meet all of the company's obligations and that availability under the secured revolver will be adequate to fund working capital and capital spending requirements, Austin said in a press release.

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