S&P lowers Fortune Brands

Standard & Poor's said it lowered its long-term ratings on Fortune Brands Inc., including lowering the corporate credit rating to BBB- from BBB, and affirmed the company's A-3 short-term corporate credit and commercial paper ratings.

The outlook is negative.

The agency said the downgrade reflects Fortune Brands' much weaker-than-expected operating performance and credit measures for the year ended Dec. 31. It is S&P's opinion that the deteriorating macroeconomic conditions globally and the protracted weakness in the U.S. housing market will continue to pressure the company's operating results in 2009 and that credit measures will further weaken as a result.

The BBB- rating reflects Fortune Brands' leading brand names in diverse operating segments and its historically relatively stable cash flow characteristics within the spirits business, S&P said.

The company's high debt levels, leveraged financial profile, exposure to the very weak domestic residential housing market and the competitive business segments in which the company participates temper these factors, S&P said.

For the 12 months ended Dec. 31, the adjusted debt-to-EBITDA ratio was estimated to be about 4 times.

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