Moody's: Mohawk outlook stable

Moody's Investors Service said it changed Mohawk Industries, Inc.'s outlook to stable due to expectation that demand has likely stabilized for residential floor coverings and that Mohawk's credit metrics will improve in 2010.

The speculative grade liquidity rating was upgraded to SGL 1 from SGL 2 and the Ba1 corporate family and probability-of-default ratings were affirmed as was the Ba2 (LGD5, 71%) unsecured notes rating.

The Ba1 corporate family rating reflects Mohawk's leading market share in the carpet segment, floor tiling segment and the laminate segment, consistently strong cash flow and its generally conservative financial policies, the agency said.

These factors help offset the lower levels of discretionary consumer spending, continuing uncertainty in the housing market and declining demand for commercial floor covering, Moody's noted.

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