S&P cuts Vulcan Materials

Standard & Poor's said it lowered Vulcan Materials Co. and subsidiary Legacy Vulcan Corp.'s corporate credit and senior unsecured debt ratings to BBB+ from A- and removed ratings from CreditWatch with negative implications, where they were placed on Aug. 7.

The A-2 short-term corporate credit and commercial paper ratings were affirmed.

The outlook is negative.

S&P said the downgrade reflects its assessment that as a result of weakening commercial construction activity, the ongoing housing downturn and uncertainty regarding near-term infrastructure spending, the company's financial profile will not be consistent with the previous rating.

The issuer has a total adjusted debt-to-EBITDA ratio of 3.9x.

Ratings reflect Vulcan's leading position, long-term prospects for infrastructure spending, its historically solid earnings and cash flow, and its overall conservative financial policies, the agency said.

Vulcan's exposure to cyclical construction end markets, its smaller size and more limited scope of operations than those of most other highly rated industrial companies temper company strengths, the agency noted.

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