S&P: Masco view negative

Standard & Poor's said it revised the outlook on Masco Corp. to negative from stable and affirmed the BBB+ corporate credit rating.

The outlook change reflects Masco's expectations of substantially weaker earnings and cash flow in 2008, driven by the ongoing housing downturn, the agency said, as well as uncertainties about the depth and duration of that downturn.

Ratings reflect the company's leading market positions in a broad range of consumer products for the home improvement and residential construction markets, S&P said, as well as significant financial flexibility, substantial availability under its bank line and the ability to sell discrete lines of business.

Ratings also reflect industry cyclicality, pricing and commodity cost pressures and a somewhat aggressive financial policy relative to shareholder returns, the agency said.

Due to a decline in earnings, the issuer's total debt-to-EBITDA ratio could exceed 3.5 times, S&P added.

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