POS gets DOWNGRADED!!!
Fitch Affirms Newell Rubbermaid's IDR at 'BBB/F2'; Outlook Revised to Negative
NEW YORK, Dec 17, 2008 (BUSINESS WIRE) -- Following Newell Rubbermaid Inc's (NWL) announcement regarding a difficult 4th quarter of 2008 and an anticipated challenging 2009, Fitch Ratings has affirmed NWL's Issuer Default Rating (IDR) and debt ratings as follows:
--IDR at 'BBB';
--Short-term IDR at 'F2';
--Bank credit facility at 'BBB';
--Senior unsecured notes at 'BBB';
--Commercial paper at 'F2';
--Trust convertible preferred stock (QUIPS) at 'BBB-'.
The Rating Outlook has been revised to Negative from Stable.
A three year-term loan issued in September 2008 has been assigned a 'BBB' rating with a Negative Outlook.
Today NWL announced an expected significant sales decline in the low teens for the 4th quarter of 2008 and a sharp decline in EPS in the 4th quarter and for the full year. It also announced significant cost reduction steps to meet the upcoming challenges. The significant sales impact from recent economic conditions and the resulting earnings decline has not changed the company's cash flow estimates for 2008. However, 2009 is expected to be more challenging and near term cash flows could be pressured.
NWL's ratings reflect: expected satisfactory credit metrics following this announcement; better product and/or geographical mix from its most recent acquisitions; a diverse product line of brand name consumer products; reduction of manufacturing overhead and labor costs; and the expectation of significant commodity cost reduction in 2009. These attributes are somewhat offset by the suddenness and degree of the economic downturn and the near term effects on sale, earnings and cash flow.
The Negative Outlook reflects poor global economic conditions for most, if not all of 2009, lower free cash flow and weakening credit protection measures.
With $748 million in 2009 debt maturities, Fitch expects that NWL will use a combination of internally generated cash or refinancing to address these maturities. Overall debt balances are anticipated to decline in 2009.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
SOURCE: Fitch Ratings
Everything I post is my opinion, even when there is facts.
