Moody's Investors Service upgraded the senior unsecured debt ratings of US-based Eagle Materials Inc to Baa3 from Ba1. The rating outlook is stable.
The upgrade reflects Moody's view that Eagle Materials has the willingness and ability to defend its investment grade rating in a downturn.
The upgrade is also supported by strength in the company's financial ratios, "which are among the best in the building materials rated universe," Moody's notes. Eagle Material's adjusted debt-to-EBITDA was 1.7x at fiscal year end March 31, 2017, and has ranged from 1.5x to 3.0x over the last five years.
"We expect the company to maintain adjusted debt-to-EBITDA below 2.5x, but note that this metric could be slighly higher temporarily as Eagle Material's pursues its growth strategy," the rating's agency adds.
The stable rating outlook reflects Moody's expectation that operating performance and key credit metrics will modestly improve with the recovery in construction spending and repair and remodeling activity.
