Moody’s raises Headwaters, notes

Moody's Investors Service said it upgraded Headwaters Inc.'s corporate family rating to B2 from B3, probability of default rating to B2-PD from B3-PD, $400 million senior secured notes due 2019 to B1 (LGD3) from B2 (LGD3) and $150 million senior unsecured notes due 2019 to Caa1 (LGD5) from Caa2 (LGD5).

The outlook is stable.

The upgrades are based on improved debt leverage metrics and its expectations that Headwaters operating performance will continue to get better, yielding better debt credit metrics, Moody’s said. They result from results expectations that operating profits and cash flow generation will continue to grow, resulting in debt credit metrics supportive of higher ratings.

Headwaters' light building products business will benefit from higher volumes due to sustained strength in new housing construction and repair and remodeling, both drivers of this business' revenues.

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