Moody's cuts Vulcan Materials

Moody's Investors Service said it downgraded Vulcan Materials Co.'s senior unsecured rating to Baa3 from Baa2 and its commercial paper rating to prime-3 from prime-2.

The outlook is negative.

The downgrade is driven by an expectation that Vulcan's operating earnings, cash flow and EBITDA will remain weak over the intermediate term as it grapples with soft pricing in several key markets, low demand from private construction and ultimately a conclusion to federal stimulus spending, Moody's said.

Despite the company's debt reduction efforts, which have eliminated about $900 million since peaking in 2008, and its commitment to make further reductions, leverage metrics will likely remain elevated and coverage metrics will remain weak until more robust private sector demand takes hold, the agency said.

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