S&P rates Headwaters notes CCC+

Standard & Poor's said it assigned a CCC+ rating to Headwaters Inc.'s proposed $150 million senior unsecured notes.

The recovery rating is 6, indicating 0% to 10% expected default recovery.

The agency also said it affirmed the B+ rating on the company's $400 million senior secured notes. The recovery rating remains at 2, indicating 70% to 90% expected default recovery.

S&P also said it affirmed the CCC+ rating on its 2½% convertible senior subordinated notes due 2014. The recovery rating remains at 6.

The B corporate credit rating remains unchanged.

Headwaters is seeking to issue $150 million of senior unsecured notes with proceeds expected to fund future acquisitions and to be used for general corporate purposes.

The ratings reflect the company's weak business risk and highly leveraged financial risk profile, the agency said.

The ratings also consider its exposure to cyclical residential and non-residential end markets, which is partially offset by moderate product diversity and leading positions in the coal combustion business, S&P said.

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