S&P Global Ratings upgraded Vulcan Materials Co.'s ratings to BBB+ from BBB, citing the company's improved leverage levels.

The construction materials supplier's revenue and adjusted EBITDA rose by more than 12% in 2019, which in turn helped lower its debt leverage, the rating agency said.

Vulcan's funds from operations-to-debt and free operating cash flow-to-debt ratios improved to about 34% and 20%, respectively, at the end of 2019. The debt-to-EBITDA ratio improved to about 2.5x in 2019 and is estimated to remain below 3x over the next 24 months, according to S&P Global Ratings.

The rating agency maintained a stable outlook on Vulcan Materials on expectations that operating performance will continue to strengthen on the back of healthy U.S. construction markets and improved profitability in the company's asphalt business. This would result in leverage at or below 2x and FFO-to-debt ratio of more than 40% in 2020, the rating agency noted.

Separately, Moody's revised its outlook on Vulcan Materials to positive from stable. "The positive outlook reflects our expectation of good cash flow, with approximately $400 million and $700 million of free cash flow after dividends annually, in each of the next two years," said Moody's Vice President-Senior Analyst Griselda Bisono.

Moody's affirmed its Baa3 senior unsecured rating with the view that the company would focus on lowering leverage while maintaining strong liquidity.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.