Moody's Downgrades Vulcan Materials

NEW YORK (AP) -- Moody's Investors Service said Friday it downgraded Vulcan Materials Co.'s debt ratings with a negative outlook due to the company's borrowings to finance its $4.2 billion acquisition of Florida Rock Industries Inc.

Moody's lowered Vulcan's senior unsecured debt rating to "A3" from "A1," both of which are investment-grade. The negative outlook implies that there is a 40 percent chance the company will be downgraded again over the next 18 months.

Vulcan will finance its acquisition of Florida Rock through a $500 million, 364-day senior unsecured revolving credit facility, a $1.5 billion five-year senior unsecured revolving credit facility and a $2 billion, 364-day senior unsecured bridge facility. Vulcan intends to refinance a portion of the commercial paper issued for this transaction with senior unsecured notes of varying maturities.

Moody's said its downgrade reflects the amount of debt incurred as well as Florida Rock's exposure to the residential housing market. Both companies produce and sell construction materials.

Vulcan shares fell $1.30 to $82.01 in afternoon trading.