Moody's rates Vulcan Materials notes A3

Moody's Investors Service said it assigned an A3 rating to Vulcan Materials Co.'s $1.2 billion senior unsecured notes, which are being issued in four tranches: $325 million will mature in 2010, $300 million will mature in 2012, $350 million will mature in 2017 and $250 will mature in 2037.

The agency also affirmed Vulcan's Prime-2 short-term rating and the A3 senior unsecured rating of Legacy Vulcan Corp. (formerly Vulcan Materials company prior to the acquisition of Florida Rock).

The outlook is negative.

Proceeds from the notes will be used to partially refinance debt incurred to fund the Florida Rock acquisition. While the impact of the refinancing does not change Vulcan's overall financial leverage profile, Moody's believes the transaction substantively improves the company's liquidity profile by extending its debt maturity profile.

Vulcan's A3 senior unsecured ratings reflect the high level of debt incurred to finance the Florida Rock acquisition, the integration risk associated with combining Florida Rock into the larger organization and the more challenging conditions for Florida Rock's business given its relatively higher exposure to the cement and concrete markets and to the residential housing market than Legacy Vulcan's business profile,

the agency said.

The rating also takes into account the company's position as the largest producer of construction aggregates in the United States and its strong presence in the southern region of the country where construction activity is especially robust and seasonality has less of an effect on operations, Moody's said.

The pro forma debt-to-EBITDA ratio is around 3.3x, compared with 0.9x at the end of 2006.

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