Moody’s ups Building Materials, notes

Moody's Investors Service said it upgraded Building Materials Holding Corp.’s corporate family rating to B2 from B3 and its probability of default rating to B2-PD from B3-PD based on the expectations that Building Materials’ operating performance will continue to improve, resulting in better debt credit metrics.

The agency also upgraded the company’s senior secured notes due 2018 to B3 (LGD5) from Caa1 (LGD4).

The outlook is stable.

Moody’s said the upgrade results from better-than-expected performance. Building Materials is benefitting from growth in the new housing construction sector, the primary driver of its revenues. Although Building Materials operates mainly in western United States and Texas, the national trends for housing bode well for the company.

The agency estimates that new housing starts will be in the 975,000 to 1 million range for 2014, and up to 1.1 million to 1.2 million in 2015.

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