Moody's ups Headwaters, gives notes B2

Moody's Investors Service said it assigned a B2 rating to Headwaters Inc.'s proposed offering of $280 million of senior secured notes due 2014, and raised the company's corporate family and probability of default ratings to B3 from Caa1.

The company's speculative-grade liquidity rating was also raised to SGL-3 from SGL-4 and its outlook was changed to stable from negative, the agency said.

The rating upgrades and stable outlook primarily reflect the benefits stemming from a series of proposed financing transactions that would extend the company's debt maturities, eliminate near-term refinancing risk, and provide an asset-based revolving credit facility with few financial covenants, thus providing the company with greater financial flexibility as it manages through a potentially extended period of weakness for its principal construction businesses, Moody's said.

The one-notch upgrade of Headwaters' corporate family rating, to B3, primarily reflects the improved debt maturity profile and more certain liquidity that results from the new financings, the agency noted.

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