S&P rates Mueller notes B-

Standard & Poor's said it assigned its B+ corporate credit and B- senior unsecured debt ratings to Mueller Holdings (NA) Inc.'s $110 million senior discount notes due 2014. Interest will be non-cash payable in kind for the first five years and cash pay thereafter.

Proceeds from this offering will be used to pay a distribution to shareholders.

The outlook is stable.

At the same time, S&P affirmed its outstanding ratings on wholly owned subsidiary Mueller Group Inc. (B+/stable/--), including the first-priority senior secured bank loan at B+, the second-priority senior secured notes at B-, and the subordinated notes at B-.

S&P said the ratings on Mueller Holdings are the same as those on Mueller. The consolidated ratings reflect Mueller's aggressive debt leverage and weak credit protection measures, its aggressive financial policies, cyclical end-markets, and the competitive and capital-intensive nature of the industry.

These risk factors are partially offset by the company's solid business positions within niche segments of the North American flow-control industry, a meaningful percentage of replacement business, and large installed base.

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