Fitch affirms Lowe's senior notes at A

Fitch Ratings said it has affirmed Lowe's Cos. Inc.'s senior notes and debentures at A and commercial paper at F1 following the company's announcement of a $1 billion share repurchase program.

The outlook is stable.

Fitch said that despite the share repurchase program, financial leverage is expected to continue to trend lower as Lowe's finances the program with internally generated funds. Lowe's is also expected to repay a sizable $600 million debt maturity in 2005 with free cash flow. Lowe's was able to self-fund its growth for the first time in 2002, and free cash flow is expected to grow over the next few years.

The ratings also reflect Lowe's strong, number two position in the home improvement retail market, its solid operating performance, and its relatively conservative financial profile. Fitch said these factors are weighed against the risks associated with managing an aggressive expansion program, and the longer-term potential for overbuilding in the sector.

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