TEXT-S&P rates Leggett & Platt proposed notes 'BBB+'

Wed Aug 8, 2012 10:41am EDT

Aug 8 - Standard & Poor's Ratings Services today assigned its 'BBB+'
issue-level rating to Leggett & Platt Inc.'s proposed $300 million
senior unsecured notes due 2022. The company expects to use the proceeds to
repay outstanding commercial paper and for general corporate purposes, including
acquisitions and share repurchase. The proposed new notes contain a
change-of-control provision. 

The 'BBB+' rating on the U.S.-based diversified manufacturer of residential, 
commercial and industrial products and components reflects our assessment of 
the company business profile as "satisfactory" and its financial risk profile 
as "intermediate." The company participates in fragmented and price 
competitive markets but its scale, highly automated production lines, vertical 
integration into steel production, good distribution capabilities, and 
comprehensive product portfolio all offer competitive advantages. About 
two-thirds of Leggett's demand is tied to consumer discretionary spending and 
we continue to expect relatively soft growth over the next couple of years.

Although slow volume and revenue growth will likely continue to limit margin 
expansion potential, we believe that productivity gains and the higher 
profitability of a recent acquisition could lift EBITDA margins to about 12% 
this year. Free cash flow generation should remain consistent, exceeding $250 
million, supporting the company's significant dividend payout, and along with 
the slowly improving operational credit measures trends, the stable outlook. 
However, we expect leverage to remain slightly above 2.5x and funds from 
operations to debt close to 35% at year-end 2012, which would be at the low 
end of our expectations for the rating. We therefore continue to see limited 
headroom for operational underperformance, or for elevated buyback or 
acquisition activity through the remainder of 2012 and into 2013.

For the complete corporate rating rationale, please see the summary analysis 
on Leggett & Platt, published May 24, 2012.

RELATED CRITERIA AND RESEARCH
     -- Business Risk/Financial Risk Matrix Expanded, May 27, 2009
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008

RATINGS LIST

Leggett & Platt Inc.
Corporate credit rating            BBB+/Stable/A-2 

Rating Assigned
 Senior unsecured
  $300 mil notes due 2022          BBB+


Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.

Primary Credit Analyst: Gregoire Buet, New York (1) 212-438-4122;
                        gregoire_buet@standardandpoors.com
Secondary Contact: Dan Picciotto, CFA, New York (1) 212-438-7894;
                   dan_picciotto@standardandpoors.com


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 Time          USN   User   Headline
 08/08/2012    WNA2  WE     S&P RATES LEGGETT & PLATT PROPOSED $300MM
 10:29:48      55    SCRIP  UNSECD NOTES 'BBB+'
 NEW YORK (Standard & Poor's) Aug. 8, 2012--Standard & Poor's Ratings Services
today assigned its 'BBB+' issue-level rating to Leggett & Platt Inc.'s proposed
$300 million senior unsecured notes due 2022. The company expects to use the
proceeds to repay outstanding commercial paper and for general corporate
purposes, including acquisitions and share repurchase. The proposed new notes
contain a change-of-control provision. The 'BBB+' rating on the U.S.-based
diversified manufacturer of residential, commercial and industrial products and
components reflects our assessment of the company business profile as
"satisfactory" and its financial risk profile as "intermediate." The company
participates in fragmented and price competitive markets but its scale, highly
automated production lines, vertical integration into steel production, good
distribution capabilities, and comprehensive product portfolio all offer
competitive advantages. About two-thirds of Leggett's demand is tied to consumer
discretionary spending and we continue to expect relatively soft growth over the
next couple of years. Although slow volume and revenue growth will likely
continue to limit margin expansion potential, we believe that productivity gains
and the higher profitability of a recent acquisition could lift EBITDA margins
to about 12% this year. Free cash flow generation should remain consistent,
exceeding $250 million, supporting the company's significant dividend payout,
and along with the slowly improving operational credit measures trends, the
stable outlook. However, we expect leverage to remain slightly above 2.5x and
funds from operations to debt close to 35% at year-end 2012, which would be at
the low end of our expectations for the rating. We therefore continue to see
limited headroom for operational underperformance, or for elevated buyback or
acquisition activity through the remainder of 2012 and into 2013. For the
complete corporate rating rationale, please see the summary analysis on Leggett
& Platt, published May 24, 2012. RELATED CRITERIA AND RESEARCH -- Business
Risk/Financial Risk Matrix Expanded, May 27, 2009 -- 2008 Corporate Criteria:
Analytical Methodology, April 15, 2008 RATINGS LIST Leggett & Platt Inc.
Corporate credit rating BBB+/Stable/A-2 Rating Assigned Senior unsecured $300
mil notes due 2022 BBB+ Complete ratings information is available to subscribers
of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All
ratings affected by this rating action can be found on Standard & Poor's public
Web site at www.standardandpoors.com. Use the Ratings search box located in the
left column. Primary Credit Analyst: Gregoire Buet, New York (1) 212-438-4122;
gregoire_buet@standardandpoors.com Secondary Contact: Dan Picciotto, CFA, New
York (1) 212-438-7894; dan_picciotto@standardandpoors.com No content (including
ratings, credit-related analyses and data, model, software, or other application
or output therefrom) or any part thereof (Content) may be modified, reverse
engineered, reproduced, or distributed in any form by any means, or stored in a
database or retrieval system, without the prior written permission of Standard &
Poor's Financial Services LLC or its affiliates (collectively, S&P). The Content
shall not be used for any unlawful or unauthorized purposes. S&P and any
third-party providers, as well as their directors, officers, shareholders,
employees, or agents (collectively S&P Parties) do not guarantee the accuracy,
completeness, timeliness, or availability of the Content. S&P Parties are not
responsible for any errors or omissions (negligent or otherwise), regardless of
the cause, for the results obtained from the use of the Content, or for the
security or maintenance of any data input by the user. The Content is provided
on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED
WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR
DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE
CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event
shall S&P Parties be liable to any party for any direct, indirect, incidental,
exemplary, compensatory, punitive, special or consequential damages, costs,
expenses, legal fees, or losses (including, without limitation, lost income or
lost profits and opportunity costs or losses caused by negligence) in connection
with any use of the Content even if advised of the possibility of such damages.
Credit-related and other analyses, including ratings, and statements in the
Content are statements of opinion as of the date they are expressed and not
statements of fact. S&P's opinions, analyses, and rating acknowledgment
decisions (described below) are not recommendations to purchase, hold, or sell
any securities or to make any investment decisions, and do not address the
suitability of any security. S&P assumes no obligation to update the Content
following publication in any form or format. The Content should not be relied on
and is not a substitute for the skill, judgment, and experience of the user, its
management, employees, advisors, and/or clients when making investment and other
business decisions. S&P does not act as a fiduciary or an investment advisor
except where registered as such. While S&P has obtained information from sources
it believes to be reliable, S&P does not perform an audit and undertakes no duty
of due diligence or independent verification of any information it receives. To
the extent that regulatory authorities allow a rating agency to acknowledge in
one jurisdiction a rating issued in another jurisdiction for certain regulatory
purposes, S&P reserves the right to assign, withdraw, or suspend such
acknowledgement at any time and in its sole discretion. S&P Parties disclaim any
duty whatsoever arising out of the assignment, withdrawal, or suspension of an
acknowledgment as well as any liability for any damage alleged to have been
suffered on account thereof. S&P keeps certain activities of its business units
separate from each other in order to preserve the independence and objectivity
of their respective activities. As a result, certain business units of S&P may
have information that is not available to other S&P business units. S&P has
established policies and procedures to maintain the confidentiality of certain
nonpublic information received in connection with each analytical process. S&P
may receive compensation for its ratings and certain analyses, normally from
issuers or underwriters of securities or from obligors. S&P reserves the right
to disseminate its opinions and analyses. S&P's public ratings and analyses are
made available on its Web sites, www.standardandpoors.com (free of charge), and
www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be
distributed through other means, including via S&P publications and third-party
redistributors. Additional information about our ratings fees is available at
www.standardandpoors.com/usratingsfees. Any Passwords/user IDs issued by S&P to
users are single user-dedicated and may ONLY be used by the individual to whom
they have been assigned. No sharing of passwords/user IDs and no simultaneous
access via the same password/user ID is permitted. To reprint, translate, or use
the data or information other than as provided herein, contact Client Services,
55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to:
research_request@standardandpoors.com. Copyright (c) 2012 by Standard & Poor's
Financial Services LLC. All rights reserved. In addition to CreditWire, Standard
& Poor's also offers RatingsDirect, the online source for real-time, objective
credit ratings and research; and RatingsXpress, a real-time, customizable
digital feed of credit information. If you are interested in becoming a
subscriber and would like more information on Standard & Poor's real-time
information products and services, please call: HONG KONG (852) 2533-3500;
LONDON (44) 20-7176-7176; MELBOURNE (61) 3-9631-2000; NEW YORK (1) 212-438-7280;
PARIS (33) 1-4420-6758 NORMAL RATINGS S&P Rates Leggett & Platt Proposed $300MM
Unsecd Notes 'BBB+' yes
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