Moody's upgrades Koppers

Moody's Investors Service said it raised Koppers Holdings Inc.'s 9 7/8% senior discount notes due 2014 to Caa1 from Caa2 and corporate family rating to B1 from B2 and Koppers Inc.'s 9 7/8% senior secured notes due 2013 to B1 from B2.

The outlook is stable.

The upgrade follows the recently completed initial public offering of Koppers Holding and the use of proceeds to redeem roughly $109 million of Koppers' senior secured notes. The IPO also added a credit-friendly layer of junior capital and a potential source of external financing, the agency said, and the debt reduction restores Koppers Holding's consolidated credit metrics to levels that the company had prior to the issuance of its discount notes in November 2004.

Moody's said Koppers' businesses are performing well and benefit from strong aluminum, steel and railroad demand.

The ratings are constrained by the cyclicality underlying many of Koppers' businesses and by uncertainty related to legal proceedings, antitrust investigations and disclosed deficiencies in the design and operation of internal controls related to the company's information systems, the agency said.

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