S&P: Martin Marietta on watch

Standard & Poor's said it placed its ratings on Martin Marietta Materials Inc., including the BBB+ corporate credit rating, on CreditWatch with negative implications.

"The CreditWatch listing follows Martin Marietta's announcement that it had launched an exchange offer to acquire Vulcan Materials Co. for approximately $4.7 billion in stock," said S&P credit analyst Thomas Nadramia in a news release.

According to S&P, if the transaction were to proceed and be completed as proposed, total pro forma adjusted debt would approximate $4.7 billion, resulting in total adjusted debt to EBITDA, not including proposed synergies, of about 6.3x. The agency said this level is potentially more in-line with a lower rating for Martin Marietta despite S&P's view of the combined entity's likely strong business risk profile.

If the acquisition is completed as currently proposed, and market conditions remain in-line with expectations, S&P said it would likely lower the ratings on Martin Marietta, potentially by more than one notch.

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