S&P assigns Masco notes BBB

S&P said it assigned its BBB issue-level rating to Masco Corp.’s planned $1.5 billion of senior unsecured notes.

“We rate the unsecured notes at the same level as our long-term issuer credit rating on Masco because it has minimal secured debt or obligations that would rank as a priority over its unsecured debt in a hypothetical post-default recovery. Substantially all of the company’s debt is held at the parent level, with some payables at its operating subsidiaries,” the agency said in a press release.

The proceeds will be used to redeem several of its higher-coupon notes due in the next few years.

“We view the transaction as moderately leveraging, given the increase in Masco’s debt levels and the large make-whole premiums on the redemptions, though we consider these considerations to be minor in the context of the company’s robust credit measures, as well as the significant long-term interest savings and maturity extension provided by the transaction,” S&P said.

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