Moody's Investors Service announced a series of credit actions for Core & Main LP on Monday, upgrading the company's senior secured term loan ratings to Ba2 from Ba3 while affirming the Ba2 corporate family rating and the Ba2-PD probability of default rating. The ratings agency also assigned a Ba2 rating to the proposed $800 million senior secured term loan B due 2033 and changed the outlook to positive from stable.
Proceeds from the proposed term loan will be used to partially repay the company's existing first lien term loan that matures in 2028. Moody's left Core & Main's speculative grade liquidity rating unchanged at SGL-1.
The affirmation of the Ba2 corporate family rating reflects what Moody's characterizes as strong operating performance and an expectation that the company will sustain that performance. The agency highlighted Core & Main's municipal segment as a particular area of ongoing strength. At the same time, Moody's noted that activity in new construction is sluggish across residential and many non-residential end markets.
As of May 3, 2026, Core & Main reported a debt-to-EBITDA ratio of approximately 2.4x. Moody's said the upgrade of the existing term loan ratings from Ba3 to Ba2 was driven in part by the preponderance of secured debt in the company's capital structure and by the support expected from unsecured debt and other unsecured claims, including trade payables and operating leases.
The ratings agency described the positive outlook as reflecting its expectation that Core & Main will continue to pursue conservative financial policies, sustain low leverage and maintain robust profitability while executing its growth strategy. Moody's projects the company will preserve very good liquidity over the next 12 to 15 months and anticipates the firm will generate more than $500 million of free cash flow annually during each of the next two years.
Core & Main publicly targets a net debt-to-EBITDA range of 1.5x to 3x. Moody's commentary and the recent rating actions center on that leverage target, the composition of the capital structure and the company's projected cash generation in the near term.
Contextual note: The ratings decisions and outlook change are based on the factors Moody's identified, including operating performance, capital structure characteristics and liquidity projections.