Fitch Rates Sherwin-Williams' Proposed $750MM Sr. Notes Offerings 'A'; Ratings on Watch Negative

  Fitch Rates Sherwin-Williams' Proposed $750MM Sr. Notes Offerings 'A';
  Ratings on Watch Negative

Business Wire

NEW YORK -- December 04, 2012

Fitch Ratings has assigned an 'A' rating to The Sherwin-Williams Company's
(NYSE: SHW) proposed offering of $500 million principal amount of senior notes
due 2017 and $250 million principal amount of senior notes due 2042. Proceeds
from these notes issuances will be used to fund the recently announced
acquisition of Consorcio Comex, S.A. de C.V. (Comex) for $2.34 billion,
including assumed debt, in an all-cash transaction. SHW's ratings remain on
Rating Watch Negative, where they were placed on Nov. 13, 2012, following the
announcement of the acquisition. The transaction is expected to close during
the first quarter of 2013.

The following ratings remain on Rating Watch Negative:

--IDR 'A';

--Revolving bank credit facilities 'A';

--Senior unsecured debt 'A';

--Short-term IDR 'F1';

--Commercial paper (CP) 'F1'.

Comex is a privately held business with operations in Latin America, the U.S.
and Canada. In 2011, the company had $1.4 billion of sales, 66% of which was
generated in Mexico and the remaining 34% in the U.S. and Canada. Comex
manufactures and sells architectural and industrial coatings in Mexico through
3,300 points of sale operated by 750 independent concessionaires. In the U.S.,
Comex sells paint and coatings products under a variety of brand names through
240 company-operated paint stores. In Canada, the company markets multiple
brands of paint and coatings through 78 company-operated paint stores and
approximately 1,500 independent paint dealers.

The proposed acquisition has good strategic rationale for SHW. The acquisition
augments its current business mix and provides the company with a meaningful,
controlled distribution platform in Mexico, the western U.S. and Canada, where
its store count is currently low. The acquisition also improves SHW's scale
throughout Latin America and provides the company with strong brand names in
that region.

While Fitch views the transaction as strategically positive for SHW, the
company's long- and short-term IDRs are likely to be downgraded to 'A-' and
'F2', respectively, given the large amount of debt to be assumed in the
acquisition and the resulting increase in leverage as well as integration
risks associated with the transaction. Leverage as measured by debt to EBITDA
will increase from 0.8x for the LTM period ending Sept. 30, 2012 to
approximately 2.75x-3x at the close of the transaction. (This assumes that SHW
borrows roughly $2.4 billion of debt and does not include EBITDA contribution
from Comex.) Fitch expects leverage will remain at or above 2x for the 12 - 18
months following the closing of the transaction with the expectation of some
debt repayment and EBITDA contribution from Comex.

Fitch expects to resolve the Rating Watch Negative upon the closing of the
transaction and review of SHW's financial profile, debt reduction plans and
integration strategy for the acquisition.

Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology' (Aug. 8, 2012).

Applicable Criteria and Related Research:

Corporate Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=684460

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