Fitch rates Hughes notes BBB-

Fitch Ratings said it assigned a BBB- rating to the senior unsecured debt of Hughes Supply Inc., including the company's $300 million senior unsecured notes due October 2014 and revolving credit agreement. The outlook is stable.

Fitch said the proposed rating and outlook for Hughes are based on the company's leading market position in a majority of its product distribution segments, comprehensive product offering, diversified customer base, proven management team, solid cash flow generation and proposed equity offering.

Risk factors include the inherent cyclical nature of the residential, commercial and industrial construction markets, some geographic concentration, the low (but stable) margins of the business and the potential of debt-financed acquisitions, according to Fitch.

Proceeds from the new debt issue are expected to be used for repayment of debt under Hughes' revolving line of credit and $45 million of amortizing debt on its senior private notes.

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