S&P may downgrade Temple-Inland

Standard & Poor's said it placed the BBB corporate credit rating, BBB senior unsecured debt rating and A-2 commercial paper rating on Temple-Inland Inc. on CreditWatch with negative implications.

The action follows Temple-Inland's decision to separate into three public companies by spinning off both its real estate and financial services businesses. The company also plans to sell 1.8 million acres of timberlands, the agency said.

S&P said it currently views the company's existing business diversity, high level of vertical integration and substantial timberland holdings to be key factors in its rating. Therefore, the agency said it believes the loss of these assets could weaken the company's overall business risk profile and increase the volatility of its earnings and cash flows.

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