Moody's upgrades Weyerhaeuser to investment grade

Moody's Investors Service said it upgraded Weyerhaeuser Co.'s senior note rating to Baa3 from Ba1 and withdrew the company's Ba1 corporate family rating, Ba1-PD probability of default rating and SGL-1 speculative grade liquidity rating. This concludes the review for possible upgrade that began on Feb. 21, and the outlook is stable.

The agency said the upgrade recognizes Weyerhaeuser's improving operating and financial performance and reflects expectations of further strength as the company benefits from a continued pickup in U.S. housing activity.

Weyerhaeuser's Baa3 senior note rating is driven by the company's extensive timberland holdings, which provide both debt reduction capability and liquidity, as well as the company's scale and leading market position in timberlands, wood products and market pulp, Moody's said.

This is tempered by the material volatility of the company's wood products and market pulp businesses and by the expected limited free cash flow generation, the agency said.

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