S&P puts Masonite on watch

Standard & Poor's said it placed the B long-term corporate credit and BB- senior secured debt ratings of Masonite International Inc. on CreditWatch with negative implications. The B long-term corporate credit ratings on its subsidiaries, Masonite International Corp. and Masonite US Corp., were also placed on CreditWatch with negative implications.

The agency said the CreditWatch placement is based on its expectation that Masonite will breach covenants on its senior secured credit facility during 2008 as financial tests tighten amid declining profitability and the company's persistently heavy debt burden. As such, liquidity will become problematic, compelling Masonite to negotiate relief or arrange other sources of short-term funding, particularly as seasonal working capital swings consume cash in late 2008 and early 2009, S&P predicted.

The current ratings incorporate the agency's expectation that Masonite will maintain adequate liquidity through difficult conditions in the next few quarters.

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