Fitch cuts Lowe's some ratings to F1

Fitch Ratings said it affirmed Lowe's Cos., Inc.'s long-term issuer default rating at A+, bank credit facility at A+ and senior notes and debentures at A+.

The short-term issuer default and commercial paper ratings were downgraded to F1 from F1+.

The outlook is negative.

Fitch said the affirmation of the long-term issuer default rating reflects Lowe's No.2 position in the home improvement retail market, weaker credit metrics that are acceptable within the current long-term rating category and disciplined financial management.

The downgrade of the short-term issuer default and commercial paper ratings reflect Lowe's weaker positioning within the A+ rating level compared with historical levels, the agency said, as well as Lowe's lower projected cash balance in the medium term and $1 billion commercial paper outstanding as of Feb. 1.

Ratings also consider the company's average leverage target of 1.3 times for the year after a combination of leveraged share repurchase activity and softer operating results in 2007, as well as store base growth, Fitch said.

The issuer's adjusted debt-to-EBITDAR ratio was 1.5 times, compared with 1 times in 2006.

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