Moody’s upgrades HeidelbergCement

Moody's Investors Service said it upgraded the rating of HeidelbergCement AG, assigning a long-term issuer rating of Baa3.

Concurrently the agency upgraded all senior unsecured ratings of HeidelbergCement and its subsidiary HeidelbergCement Finance Luxembourg SA to Baa3 from Ba1 and all short-term ratings to provisional Prime-3 from provisional Non-Prime.

The outlook was changed to stable from positive.

"Today's upgrades reflect HeidelbergCement's strong operating performance and cash flow generation so far this year, which will reduce rising leverage linked to its acquisition of Italcementi below previous expectations. The company will continue to de-lever through 2017, as result of the swift implementation of cost synergies with Italcementi and a supportive business outlook for the next 12 to 18 months," Stanislas Duquesnoy, Moody's vice president, senior credit officer and lead analyst for HeidelbergCement, said in a news release.

Moody's also withdrew HeidelbergCement’s corporate family rating of Ba1 and probability of default rating of Ba1-PD following its upgrade to Baa3, as per the agency's practice for corporates with investment grade ratings.

In addition, Moody's upgraded all senior unsecured instrument ratings of Italcementi SpA's subsidiaries, including Ciments Francais SA to Baa3 from Ba1 and withdrew the Ba1 corporate family rating of Italcementi and senior unsecured provisional Ba1 medium-term note ratings of Italcementi and its subsidiary Italcementi Finance SA following the successful closing of the Italcementi acquisition by HeidelbergCement.

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