R.A. Yancey Lumber hosts Virginia congressman
In Crozet, Va., Congressman Robert Hurt talked politics and business at the local lumberyard, according to a report by WVIR-TV.
Gas prices were one of the macroeconomic topics of discussion. Hurt, a representative from Virginia’s 5th District, also discussed the case for a “sensible domestic energy policy,” according to WVIR-TV.
The congressman received a tour of the R.A. Yancey yard.
S&P outlook improves for home builders
Credit ratings service Standard & Poor’s (S&P) delivered a guarded but upbeat assessment of U.S. home builders, reporting that “operating conditions … have improved over the past six months, and the sector’s overall credit quality has steadied as a result.” The new report cites a “cautiously stable” outlook for the sector overall, but warns that that trend could backpedal later this year if the baseline residential construction forecast doesn’t materialize.
"We anticipate a modest uptick in new single-family home deliveries this year, which will be guarded but upbeat followed by more robust growth in 2013," said credit analyst Susan Madison. "We also expect the average selling price for new homes to be relatively flat on a year-over-year basis."
Conditions in the U.S. housing sector remain challenging, S&P said, but evidence also points to a strengthening of macroeconomic conditions. The agency noted that any improvements in the housing market will be measured against a very low base, given last year’s numbers. The housing sector is currently giving mixed signals regarding its direction, but Standard & Poor’s believes production levels are improving while pricing is bouncing along the bottom.
S&P currently maintains stable outlooks on 60% of the home-building companies it rates, an indication that ratings should hold steady over the next year under its baseline forecast scenario. In addition, more than half of all home builder ratings reside in the ‘B’ category. However, the ratings on some of the larger home builders could take a hit next year if a firm recovery does not take hold and a more pessimistic scenario comes to pass.
"We do expect the recovery in housing to be slow and uneven, and the performance of individual home builders may not directly correspond with that of the overall sector," Madison said. "For example, builders with well-located and cost-efficient platforms, along with sufficient liquidity to support higher growth trajectories, will most likely improve faster than the others. Comparatively, companies with less liquidity, weaker profitability, more material near-term debt maturities, or those contending with operational missteps, will likely lag the peer group."
Beacon Roofing Supply enters new credit deal
Using the phrase “significant milestone” to describe the news, Peabody, Mass.-based Beacon Roofing Supply entered a new five-year senior-secured credit facility consisting of a $550 million credit facility with Wells Fargo Bank.
The deal also includes a C$15 million Canadian credit facility.
The deal refinanced the Company’s prior combined $515 million credit facilities that were provided through GE Antares and an affiliate.
David Grace, the company’s executive VP & CFO, said: "We are very pleased to enter into this new arrangement with Wells Fargo, who understands our business and our unique position in the industry. The new credit facility provides attractive LIBOR margin pricing, reasonable financial covenants, and substantial liquidity and financial flexibility to aggressively pursue acquisitions and grow our company. The timing for us to refinance was ideal because interest rates are at historical low levels. There also was a very high level of interest from lenders because of our successful history of growth and profitability. This credit facility is a significant milestone in Beacon’s history."
Borrowings under the credit facility bear interest at a rate equal to LIBOR plus a margin. Such margin is initially 1.75% per year, and can range from 1.50% to 2.50% per year depending upon the company’s total leverage ratio.