Fitch: USG outlook negative

Fitch Ratings said it affirmed USG Corp.'s issuer default rating at B, secured bank credit facility at BB/RR1 and senior unsecured guaranteed notes at BB/RR1.

The agency also assigned a BB/RR1 rating to USG's private offering of $350 million of senior unsecured notes.

The outlook was revised to negative from stable, which reflects the expectation that underlying demand for the company's products will remain weak through 2011, according to the agency.

Proceeds will be used for general corporate purposes, which may include the repayment of debt, working capital, capital expenditures and acquisitions.

The rating is based on the company's leading market position in all of its businesses, strong brand recognition, its large manufacturing network and sizable gypsum reserves, the agency said.

Risks include the cyclicality of the company's end-markets, excess capacity currently in place in the U.S. wallboard industry, volatility of wallboard pricing and shipments and the company's high leverage, the agency noted.

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