Moody's lowers Masco to SGL-3

Moody's Investors Service said it downgraded Masco Corp.'s speculative-grade liquidity rating to SGL-3 from SGL-2 and placed its ratings under review for possible downgrade, including the Ba1 corporate family and probability-of-default ratings and Ba1 (LGD4, 54%) $4 billion senior unsecured notes.

The agency said the review is prompted by current and anticipated weakness in the company's sales, margins and cash flow generation caused primarily by the slowdown in new construction and in the repair and remodeling market.

The company's SGL-3 speculative-grade liquidity rating reflects Moody's revised view that the company's liquidity is adequate. The agency said Masco's comfortable cash position partially mitigates the risk presented by the growing possibility it may violate its debt-to-total capitalization covenant in the event of further impairments or operating losses.

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