S&P puts Weyerhaeuser on watch

Standard & Poor's said it placed the long-term ratings, including the BBB corporate credit rating, of Weyerhaeuser Co. on CreditWatch with negative implications and affirmed the company's A-3 short-term and commercial paper ratings.

The agency said the CreditWatch listing reflects its belief that Weyerhaeuser faces a more challenging operating environment through at least 2009 driven by the extended housing downturn, waning consumer confidence and credit market turmoil.

Although the company's meaningful cash balances, available credit facilities and valuable timberland holdings are positive considerations, S&P said Weyerhaeuser's wood products manufacturing, building products distribution and homebuilding businesses are highly cyclical and are likely to continue to generate poor earnings and cash flow until housing recovers, which the agency does not expect to occur before 2010.

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