Moody’s rates GMS loan B3

Moody's Investors Service said it assigned a B3 (LGD4) rating to the proposed $528 million senior secured term loan due 2023 of GYP Holdings III Corp., the indirect, wholly owned holding subsidiary of GMS Inc. GYP Holdings III’s B2 corporate family rating, B2-PD probability of default rating, SGL-2 speculative-grade liquidity rating and positive outlook are unchanged.

Upon closing, the new loan will replace the company's $478 million senior secured term loan due 2021. Proceeds from the $50 million term loan increase will be used to reduce a similar amount of borrowings under the company's $345 million asset-based revolving credit facility due 2021.

The agency said the B3 rating assigned to the proposed term loan, one notch below the corporate family rating, results from its effective subordination to the asset-based revolver.

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