Moody's assigns Foley Products, loans B2

Moody's Investors Service said it assigned a first-time B2 corporate family rating and B2-PD probability of default rating to Foley Products Company, LLC. Moody's also gave B2 ratings to the new senior secured first-lien credit facilities, including a $370 million term loan and a $35 million revolving credit facility issued by Foley and FPC Holdco, LLC, Foley's direct parent, as co-borrowers.

Concurrently, Foley is receiving a $135 million of cash contribution from Oaktree Capital Management, LP in the form of convertible preferred equity. Oaktree will have the right to control 37% shares in Foley through this investment.

"The B2 corporate family rating considers Foley's leading position in concrete pipes and precast concrete products in the US Southeast, its high margin, and the ability to generate positive free cash flow, which are counterbalanced with limited scale and geographic diversification," said Motoki Yanase, a Moody’s vice president and senior credit officer, in a press release.

A significant part of the term loan and the Oaktree investment will go to Foley's parent company, the Concrete Co. A smaller portion of the proceeds will be used to buy five plants from Quikrete Holdings, Inc., to expand Foley's operation outside of its historical core market in the Southeast, and pay fees and expenses related to the transaction.

The outlook is stable.

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