S&P drops AMH to CCC+

Standard & Poor's said it lowered the corporate credit ratings on AMH Holdings Inc. and its operating subsidiary Associated Materials Inc. to CCC+ from B-.

The agency downgraded the company's $165 million senior subordinated notes to CCC from CCC+ with a recovery rating of 5 and $446 million senior discount notes issued by AMH Holdings to CCC- with a recovery rating of 6.

The outlook is negative.

"The downgrades reflect our assessment that AMH's ability to service its current capital structure over the intermediate term will be challenged given our expectation for difficult operating conditions to continue due to the depressed new construction end markets and expected decline in repair and remodeling activity," S&P analyst Tobias Crabtree said in a statement.

Ratings reflect a highly leveraged financial profile, participation in the highly fragmented and competitive window industry, volatile raw material costs, cyclical end-markets and relatively high fixed overhead, according to the agency.

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