S&P lowers Valhi

Standard & Poor's said it lowered the corporate credit ratings on Valhi Inc. and its subsidiary Kronos International Inc. to B- from B and placed ratings on CreditWatch with negative implications.

The agency downgraded Kronos' €400 million senior secured notes issue due 2013 to CCC+ from B and placed the notes on CreditWatch with negative implications. The recovery rating on the notes was revised to 5 from 3.

The downgrade reflects expectation of weaker 2009 operating results related to the company's titanium dioxide business, driven by a challenging operating environment with weak global demand and a sustained recession, S&P said.

The action also incorporates the deterioration in year-over-year operating trends, a weakening of the already highly leveraged financial profile and expectation that the company will not be able to improve its credit metrics in the near term, the agency said.

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