S&P cuts Builders FirstSource

Standard & Poor's said it lowered Builders FirstSource Inc.'s corporate credit rating to B- from B and its second-lien secured notes to CCC+ from B, and revised the recovery rating to 5 from 3. Ratings were removed from CreditWatch with negative implications.

The outlook is negative.

S&P said the downgrades reflect an assessment that demand for the company's products and services will decline further as a result of the weak U.S. economy and continued housing downturn.

Ratings reflect the cyclicality of new residential construction, volatile costs of materials and limited end-market focus, the agency said.

Ratings also reflect the company's good market positions with key homebuilders and good cost flexibility, the agency noted.

The outlook could be revised to stable if the company reduces its debt-to-EBITDA ratio to less than 6x.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.