Moody's rates Masco notes Ba2

Moody's Investors Service said it assigned a Ba2 (LGD4, 56%) rating Masco Corp.'s proposed senior unsecured notes due 2020 and affirmed its corporate family and probability-of-default ratings at Ba2 and senior unsecured notes at Ba2 (LGD4, 56%). The speculative-grade liquidity rating remains SGL-2.

The outlook is stable.

The proceeds from the proposed notes will be used to refinance the company's existing $300 million senior unsecured notes due March 12, 2010. Excess proceeds will be kept on the balance sheet and used to pre-fund the $850 million senior unsecured notes due July 12, 2012.

The agency said Masco's corporate family rating considers its scale, strong market position and extensive product offerings.

Despite the likelihood of margin expansion, Masco's interest coverage and debt leverage credit metrics will remain weak, constraining the rating for an extended period of time, Moody's predicted. The debt-to-EBITDA ratio was 6.7 times at the end of 2009.

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