NEW YORK, Aug 13 - Moody's Investors Service upgraded the senior unsecured debt ratings of West Fraser Timber Company Ltd. (Toronto:WFT.TO - news) (West Fraser) to Baa2 from Baa3. We believe that cash proceeds from recent asset sales should allow West Fraser to continue pursuing its acquisition growth objectives, while still producing improved debt protection measurements. The Baa2 ratings reflect the company's low-cost operations and a moderately diversified asset base. But also the company's exposure to cyclical lumber and paper markets and the resultant volatility in its earnings, as well as its acquisition growth strategy. Ratings upgraded are: Senior unsecured notes; to Baa2 from Baa3 . West Fraser has improved its financial flexibility and strengthened its debt protection measurements over the past eighteen months through the rationalizations of non-core assets and a cost reduction program. The company recently sold its Uruguayan subsidiaries to a joint venture between Weyerhaeuser Co. (A3) and institutional investors for C$73 million, and its retail business, Revy Home Centers Inc. (Revy), to RONA Inc. (unrated) for approximately C$220 million. Available cash has increased quite substantially, and the company's ratio of debt to capital is quite low at around 31%. The original Baa3 rating had anticipated that capital spending for the company's retail business would increase over the next several years, as the company continued expanding the number or retail outlets. The sale of the retail business will enable free cash flow to be used for capital improvement projects in the company's core lumber and building materials businesses. In addition, cash proceeds from the sale of the Revy business provide the company with greater flexibility to pursue growth opportunities (acquisitions) going forward. Although we believe that the company will ultimately spend all of its currently available cash on acquisitions, and that debt may increase modestly from current levels, we would expect incremental cash flow from acquisitions to support the revised ratings. The outlook for the ratings is stable. West Fraser Timber Company is an integrated producer of lumber, engineered wood products, linerboard, and pulp. The company is headquartered in Vancouver, British Columbia.