U.S. building materials companies have ample liquidity and are positioned to withstand ongoing credit market volatility, at least in the near-term, according to Fitch Ratings. Major debt maturities in 2007 have been refinanced with new debt issuances and these companies have adequate availability under committed revolving credit facilities.

"The industry faces some uncertainty as to whether and how severely the housing downturn will spill over into commercial construction," said Robert Rulla, Director, Fitch Ratings. "Also present is the risk that the subprime and broad residential mortgage turmoil may eventually affect commercial lending."

As part of its global review of corporate liquidity, Fitch Ratings has published an analysis of refinancing and liquidity risks for the U.S. building materials industry. The companies covered in this review are: Building Materials Holding Corp. (BMHC), Martin Marietta Materials, Inc, and Masco Corporation, and each of these companies faces a varying degree of risk depending on their exposure to the downturn of the U.S. housing market.

Among these three companies, the impact of the housing downturn varies depending on the level of exposure to the residential market, and in particular, new home construction. Companies with significant exposure to public infrastructure and commercial construction have so far been able to offset the continued decline in housing. As a result, Fitch has seen varying internal reactions among companies to the housing downturn.

-BMHC, with over 90% of its revenues directed to new home construction, has taken a more defensive stance in recent months to navigate through the downturn, deferring discretionary capital expenditures, limiting acquisition activities and selling assets;

-Masco, with an estimated 40% of its sales from new home construction, expects lower profitability but continues with its aggressive share repurchase program;

-Martin Marietta, by contrast, with residential construction accounting for only 17% of its construction products, was comfortable increasing its leverage target earlier this year to accommodate debt-financed share repurchases.