Moody’s rates Foundation Building notes Caa1

Moody's Investors Service said it affirmed LSF9 Cypress Holdings LLC's (Foundation Building Materials LLC) B3 corporate family rating and B3-PD probability of default rating following Foundation's announcement that it is acquiring Winroc, a division of Superior Plus Corp.

In related actions, the agency assigned a Caa1 rating to the proposed $575 million senior secured notes.

Proceeds from the proposed notes, along with a $150 million draw under the revolving credit facility, and an equity contribution by Lone Star Funds and management in the form of common stock, will be used to acquire Winroc, and to refinance existing revolver and term loan debt. At that time, the rating assigned to the company's existing term loan will be withdrawn.

The outlook is stable.

Following the closing of the proposed transaction, Foundation's debt capital structure will consist of a $250 million asset-based senior secured revolving credit facility expiring 2021 (unrated), of which about $150 million will be outstanding at closing, $575 million senior secured notes due 2021, and about $10 million in capital lease assumed in the acquisition. Current revolver borrowings are due to prior usage for working capital needs and past acquisitions.

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