Moody's upgrades Votorantim Cement loans

Moody's Investors Service said it assigned Ba1 corporate family and probability-of-default ratings to Votorantim Cement North America Inc. and upgraded its $150 million guaranteed senior secured revolving credit facility due 2011 and $409 million guaranteed senior secured term loan due 2011 to Ba1 (LGD3, 46%) from Ba2.

The outlook is positive.

Votorantim Cement earlier acquired St. Marys Cement Inc., the entity to which Moody's had previously assigned the corporate family rating and bank loan ratings.

The agency said the upgrade and positive outlook primarily reflect the Aug. 24 upgrade of parent company Votorantim Participacoes SA to Baa3 with a positive outlook and the importance of Votorantim Cement to Votorantim Participacoes. Other key factors include Votorantim Cement's reasonable financial leverage, a market position supported by its status as the largest supplier of cement in the Great Lakes region and its assets in ready-mix concrete and construction aggregates.

Votorantim Cement's ratings also reflect the company's reduction in free cash flow due to increased capital spending over the near term, vulnerability to raw material cost inflation and vulnerability to economic weakening in the Great Lakes region, Moody's said.

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