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Vulcan Materials considers refinancing $700 million with new notes, increased credit facility
By Lisa Kerner
Charlotte, N.C., Feb. 25 – Vulcan Materials Co.’s credit metrics should reach investment-grade levels during 2015, and the company may issue additional debt in the future, subject to investment-grade parameters and market conditions, according to its investor day presentation materials.
The company held an investor day on Wednesday in Washington, D.C.
In the near-term, Vulcan plans to refinance about $700 million of debt maturities due over the next five years.
Specifically, Vulcan is expected to issue eight- to 10-year notes and increase the size of its five-year credit facility. The company expects to use proceeds to tender or call a portion of notes due in 2016, 2017 and 2018. It could also use proceeds plus available cash to pay a maturity due in 2015, according to the slide presentation.
Expected outcomes from the refinancing include keeping the overall debt level at about $2 billion, reducing maturities due over the next five years by $700 million, lowering the weighted average coupon rate and maintaining strong liquidity.
Vulcan would also better match its average debt duration and fix/floating mix to its business and asset base, according to the presentation.
In the future, Vulcan could issue additional debt, most likely longer-dated maturities consistent with longer-lived assets.
Proceeds could be used for bolt-on acquisitions, further refinancing of nearer-term maturities and repurchase of additional shares, according to the presentation.
The Birmingham, Ala., company produces construction aggregates, primarily crushed stone, sand and gravel.
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