Moody's upgrades Vulcan loan, changes outlook to stable

Moody's Investors Service said it revised Vulcan Materials Co.'s outlook to stable from negative, upgraded its senior secured revolving credit facility to Ba1 (LGD2, 16%) from Ba2 (LGD2, 28%) and speculative grade liquidity assessment to SGL-2 from SGL-3 and affirmed its corporate family rating at Ba3, probability of default rating at Ba3-PD and senior notes at Ba3 (LGD4, 58%).

In March, Vulcan amended its revolver to eliminate the asset-based-lending structure that previously governed its borrowing capacity. The agency said the SGL-2 speculative grade liquidity rating reflects Vulcan's good liquidity profile, supported by the revolver, its $193.7 million cash balance at Dec. 31 and manageable debt maturities over the next couple of years.

The stable outlook reflects Vulcan's improving financial ratios and Moody's expectations that the construction end markets it serves will continue to improve moderately in 2014.

The agency said the Ba3 corporate family rating is supported by the company's leading position in the North American aggregates industry, regional geographic and end market diversity and large proven reserves.

The rating is constrained by high financial leverage of 4.8 times as of Dec. 31 and margin and cash flow volatility expected through economic cycles, Moody's said.

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