DBRS Assigns Rating of BB (high) to Superior Plus LP’s New Issue

DBRS has today assigned a rating of BB (high) with a Stable trend to Superior Plus LP’s (Superior or the Partnership) issuance of $150 million of 8.25% Senior Unsecured Debentures, Series C, maturing on October 27, 2016 (the Unsecured Debentures). The trend is Stable. The issue is expected to settle on or about October 27, 2009.

The Unsecured Debentures rank junior to Superior’s outstanding US$10 million 6.13% Senior Secured Notes due October 29, 2013, and US$150 million 6.62% Senior Secured Notes due October 29, 2015 (collectively, the Senior Secured Notes; currently rated BBB (low) with a Stable trend) as well as to Superior’s credit facility.

The Unsecured Debentures are guaranteed by Superior General Partner Inc., Superior International Inc., ERCO Worldwide (USA) Inc. and Specialty Products & Insulation Co. (SPI). Net proceeds from the sale of the Unsecured Debentures will be used to repay existing bank indebtedness under Superior’s credit facility (balance of approximately $342 million outstanding on a pro forma basis at June 30, 2009, following the two acquisitions noted below and prior to this issuance) and for general corporate purposes. DBRS expects adequate cash flow and asset coverage for the Unsecured Debentures.

The Unsecured Debentures issue follows the September 2009 closing of the acquisitions of SPI for US$135 million and Sunoco Retail Heat for US$86 million financed in aggregate with a combination of the credit facility at the Partnership (36%), and common equity (35%) and subordinated convertible debentures (29%) at the Partnership’s parent company, Superior Plus Corporation. The acquisitions are expected to be accretive to cash flow (Superior Plus Corporation forecasts six to eight cents per common share in 2010); add geographic and market diversification to Winroc Corporation, its construction products distribution business and Superior Propane, its propane distribution business; and result in minimal impact on its key credit metrics.

Notes:
All figures in Canadian dollars unless otherwise noted.

The applicable methodology is General Rating Methodology for Non-Financial Companies, which can be found on the DBRS website under Methodologies.

This is a Corporate rating.