S&P cuts Maytag to junk

Standard & Poor's said it lowered its long-term corporate credit and senior unsecured debt ratings on Maytag Corp. to BB+ from BBB-. The company's A-3 short-term corporate credit and commercial paper ratings have been withdrawn.

The outlook is stable.

S&P said the downgrade reflects Maytag's weakened operating and financial performance and S&P's expectation that the company will continue to struggle as it attempts to restore market share in its floor care and home appliance businesses. Moreover, S&P said it expects that management will remain challenged to improve profit margins in the near term, given highly competitive industry conditions and high raw material and distribution costs amid industry volume growth, which is expected to be modest in 2005.

The ratings reflect Maytag's established brand names tempered by its weakened market position in the mature U.S. white goods industry, its vulnerability to U.S. economic cycles and its weakened financial profile, the agency said.

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