S&P cuts Sealed Air to junk

Standard & Poor's said it lowered Sealed Air Corp.'s ratings, including its corporate credit rating and senior unsecured notes, to BB+ from BBB- and assigned a recovery rating of 3 to the notes.

The ratings were removed from CreditWatch, where they were placed with negative implications on Nov. 18, and the outlook is stable.

The agency said the downgrade was prompted by a financial profile that it believes will remain too weak to support investment-grade ratings as well as by lingering concerns about management's commitment to increase cash flow to debt to the extent necessary to maintain investment-grade ratings. S&P's concerns regarding financial performance center on the likelihood of somewhat weaker demand, particularly in the protective packaging business, in the current recession.

The ratings on Sealed Air also reflect its strong business risk profile and its fairly consistent free cash flow, the agency said.

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