LafargeHolcim Ltd., the cement maker formed through a merger last month, is set to save about $120 million in debt payments over the next four years after some bonds were raised to investment grade by Moody’s Investors Service Inc.
Lafarge SA’s notes were upgraded on Monday, paving the way for a 125 basis-point reduction in coupon payments. Seven euro-and pound-denominated issues, totaling $4.3 billion and maturing through 2019, will no longer be subject to a premium caused by junk ratings.
LafargeHolcim has a stronger credit profile than Lafarge, according to Moody’s, which joined Standard & Poor’s and Fitch Ratings Ltd. in raising its assessment. The rating also reflects the combined company’s plans to sell assets and cut debt.
Moody’s upgraded Lafarge’s debt to Baa2, two levels above junk, according to a statement. S&P raised the cement maker to an equivalent BBB rating on Aug. 6. Both ratings match those for LafargeHolcim. Fitch rated Lafarge at BBB-, the lowest investment grade, last month.
A spokesman for Zurich-based LafargeHolcim couldn’t immediately comment when contacted by Bloomberg.
Coupon payment step-ups on Lafarge notes were triggered after S&P cut the company to junk in 2011. They will end following the next payments.