Fitch lowers Newell Rubbermaid notes to BBB

Fitch Ratings said it downgraded Newell Rubbermaid Inc.'s senior unsecured debt rating to BBB from BBB+ and QUIPs to BBB- from BBB. The rating on Newell's short-term debt is affirmed at F2.

The outlook is stable.

Fitch said slower-than-anticipated improvement in certain businesses, in part due to fewer new product introductions and the commodity like nature of certain businesses, have limited Newell's expected revenue and profit growth and negatively impacted its credit profile.

Newell is experiencing softness in certain businesses including writing instruments, window fashions, low-end cookware and picture frames. In addition, higher-than-anticipated overhead costs from excess manufacturing capacity and continued high resin prices have pressured operating results.

Fitch said it remains cautious about the timeliness of completion of and the level of proceeds generated from Newell's announced divestitures. While cash flow generation has benefited from working capital reductions, and modestly more is expected in 2004, ongoing improvement is not anticipated. As a result, debt reduction may be lower than Fitch previously expected.

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