S&P assigns Mueller Water notes B+

Standard & Poor's said it has assigned its B+ issue-level rating to Mueller Water Products Inc.'s proposed $225 million of senior unsecured notes along with a recovery rating of 2.

At the same time, the agency said it affirmed its B corporate credit rating on the company and lowered the issue-level rating on the senior subordinated debt to CCC+ from B-and revised the recovery rating to six from 5.

The outlook is stable.

"The corporate credit rating affirmation reflects its expectation that Mueller will improve credit measures -- which are currently weak for the ratings -- and that the company will maintain adequate liquidity," said credit analyst Dan Picciotto.

"We believe the company's liquidity profile will improve following the completion of the proposed transactions, since financial covenants under the new credit facility are expected to be less restrictive than those now in place. Also, the term loans due 2012 and 2014 would be fully repaid. We anticipate conditions to improve gradually for most of Mueller's products, while its private nonresidential construction related business could weaken further. "

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