Moody's downgrades Leggett

Moody's Investors Service said it downgraded Leggett and Platt's long-term rating to A3 and its commercial paper rating to Prime-2 following the accelerating contraction in residential and automotive related consumer spending, which comprises well over half of the company's revenue.

The outlook is negative. The action concludes a review for downgrade begun on Aug. 20.

"The downgrade reflects our concerns that discretionary consumer spending is deteriorating faster than we had expected leaving Leggett particularly vulnerable due to its heavy concentration in both the residential furniture market and the automotive market," Kevin Cassidy, senior credit officer at Moody's, said in a written statement.

The negative outlook reflects concerns that the deterioration in consumer spending will last well into 2009.

Despite the ongoing turmoil in the capital markets, Moody's said it believes that the company will maintain a strong liquidity position.

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