Moody's upgrades Koppers

Moody's Investors Service said it upgraded Koppers Holdings Inc.'s corporate family and probability-of-default ratings to Ba3 from B1, its senior unsecured bonds to B2 (LGD5, 88%) from B3 and Koppers Inc.'s senior secured bonds to Ba3 (LGD3, 49%) from B2.

The outlook is stable.

The agency said the upgrade reflects the company's continued strong financial performance since its initial public offering in February 2006, which has enabled the company to significantly reduce debt and has resulted in much improved credit metrics.

Koppers Holdings' ratings are further supported by geographic diversity, strong market shares in certain business segments, favorable cost positions, demonstrated stability in a highly leveraged and acquisitive environment and a dearth of available substitutes for its products, Moody's said.

The ratings are constrained by the inherent historical cyclicality of the company's commodity products and end markets, customer concentrations, elevated environmental risks associated with carbon-based chemical materials and a considerable number of items that could potentially consume cash in the future such as antitrust investigations and product liability lawsuits, the agency said.

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