Moody's rates Vulcan notes A3

Moody's Investors Service said it assigned an A3 rating to Vulcan Materials Co.'s senior unsecured notes issuance of $650 million due 2013 and 2018. The agency affirmed Vulcan's Prime-2 short term rating and the A3 senior unsecured rating of Legacy Vulcan Corp.

The outlook remains negative.

Proceeds will be used to refinance a portion of debt incurred to fund the acquisition of Florida Rock, which closed on Nov. 16, 2007.

Ratings reflect the company's position as the largest producer of construction aggregates in the United States, its strong presence in the southern region of the country, as well as its expansion into Florida, Moody's said.

The rating also reflects the company's healthy operating margins and consistent ability to generate cash flow from operations across economic cycles, as well as significant amount of aggregates reserves, the agency said.

The rating is constrained by the high level of debt incurred to finance the Florida Rock acquisition and the related contraction in coverage ratios, Moody's said.

The company's debt-to-EBITDA ratio continues to exceed 3 times.

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