S&P lowers PPG

Standard & Poor's said it lowered the corporate credit and senior unsecured debt ratings on PPG Industries Inc. to A- from A and the commercial paper rating to A-2 from A-1. The ratings were removed from CreditWatch with negative implications, where they were placed July 19.

The outlook is negative.

S&P said the downgrades reflect the deterioration in PPG's cash flow protection measures because of the substantial increase in debt to help fund the recently completed acquisition of unrated SigmaKalon Group.

"While SigmaKalon is a good strategic fit, there is very little flexibility for any negative surprises with regard to the strengthening of credit measures, including the key ratio of funds from operations to total debt," S&P credit analyst Wesley E. Chinn said in a written statement.

Ratings incorporate the issuer's strong, competitive positions in large coatings markets and the geographic diversity of the consolidated sales base, according to the agency.

Ratings also reflect prospects for greater consistency of earnings and operating margins over the course of a business cycle and meaningful discretionary cash flows, S&P said.

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