(VMC) Vulcan Materials Completes Bond Issuance

Vulcan Materials Company (VMC) recently announced the completion of its $1.1 billion bond issuance, which has received orders worth $3.2 billion.  The company reported that the bond issuance was undertaken to reduce its debt that is due over the next several years.

Vulcan Materials intends to use a part of the proceeds from the issuance to buy $275 million in senior unsecured notes due 2012 and 2013. It also plans to prepay a $450 million term loan due 2015 and reduce debt borrowed against its revolving credit facility. However, the company will have to incur a pre-tax charge of about $26.5 million in the second quarter related to the use of proceeds from the bonds.

Vulcan Materials also entered into an agreement with a consortium of banks to change the fixed rate of interest to floating rates on $500 million in notes due 2016.

During the first quarter of 2011, Vulcan Materials reported a net loss of 62 cents per share from continuing operations, deteriorating sharply from last year’s net loss of 53 cents per share from continuing operations.  Total revenue dropped marginally to $487.2 million from $493.3 million in the corresponding quarter of 2010. The year-over-year decline was primarily attributable to a decline in shipments in South Carolina, Florida and regions along the Gulf Coast, despite a stronger demand from public infrastructure projects in Tennessee, Virginia and Georgia.

Vulcan Materials’ cash and cash equivalents improved to $63.2 million as of March 31, 2011 from $36 million at the end of the prior-year period. However, long-term debt rose to $2.43 billion as of the above date from $2.10 billion a year ago.

Based in Birmingham, Alabama, Vulcan Materials Corp. is engaged in the production, distribution and sale of construction aggregates, and other construction materials and related services in the U.S. and Mexico. It is the nation’s largest producer of construction aggregates and a leading producer of other construction materials. Its key competitors include Cemex S.A.B. de C.V. (CX), Lafarge S.A. (LFRGY) and Martin Marietta Materials Inc. (MLM).

Vulcan Materials retains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating.

CEMEX SA ADR (CX): Free Stock Analysis Report

LAFARGE SA-ADR (LFRGY): Free Stock Analysis Report

MARTIN MRT-MATL (MLM): Free Stock Analysis Report

VULCAN MATLS CO (VMC): Free Stock Analysis Report

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