Fitch Initiates RPM International Inc. IDR at'BBB-'; Outlook Stable.

CHICAGO -- Fitch Ratings has initiated ratings on RPM International Inc. (RPM) as follows:

--Issuer Default Rating (IDR) 'BBB-';

--Senior unsecured credit facility 'BBB-';

--Senior unsecured notes 'BBB-'.

The Rating Outlook is Stable.

The ratings

incorporate the long operational history of the company, its growth through acquisitions, and its balanced portfolio of products. RPM has very manageable debt levels at $942 million at Nov. 30, 2007 and approximately $277 million available under the $400 million revolver. Capital expenditures are very manageable at $70 million-$75 million. Free cash flow is projected to remain positive.

The Stable Outlook reflects the likelihood that RPM's near-term financial performance should remain steady and debt levels should go up slightly. Overall business conditions are stable despite the weakness in the new residential housing sector. Fitch is assuming RPM will probably refinance its upcoming $100 million maturity. Fitch is also expecting that acquisitions will continue over the next two years.

The long-term outlook for the residential repair-and-remodeling products' market remains quite strong and is estimated to average a growth rate of more than 5% annually over the next four years. However, with the sharper than expected decline of housing market activity and the recent financial market turmoil, Fitch expects that this will contribute to greater consumer caution and thus less spending. RPM has a 5%-7% of total revenues (approximately $200 million) exposure to the new residential home building sector. However, Fitch will continue to monitor both the residential and commercial building segments to watch for further weakness.

RPM International Inc. is a multinational holding company with subsidiaries that manufacture and market various specialty chemical product lines including high-quality specialty paints, protective coatings, roofing systems, sealants and adhesives for the maintenance and improvement needs of industrial and consumer markets.

RPM's business is divided into two reportable operating segments: the consumer segment and the industrial segment. Within each reportable operating segment, individual groups of companies and product lines generally address common markets, utilize similar technologies, and are able to share manufacturing or distribution capabilities.

The industrial segment, which comprises approximately 63% of total net sales, includes maintenance and protection products for roofing and waterproofing systems, flooring, corrosion control and other specialty applications. The industrial product lines are sold primarily to distributors, contractors and directly to certain end users, such as industrial manufacturing facilities, educational and governmental institutions, and commercial establishments. Industrial segment products reach their markets through a combination of direct sales, sales representative organizations, distributor sales, and sales of licensees and joint ventures. The industrial segment generated $1.2 billion in net sales for the six months ended Nov. 30, 2007.

The consumer segment comprises approximately 37% of total net sales and includes rust-preventative, special purpose and decorative paints, caulks, sealants, primers and other branded consumer products. The major portion of RPM's consumer product lines is focused on maintenance, energy efficiency, patch and repair, and small project renovation and redecorating. Consumer segment products are sold to retailers through a combination of direct sales, sales representative organizations and distributor sales. The consumer segment generated $622.9 million in net sales for the six months ended Nov. 31, 2007.

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