S&P rates Home Interiors loan B

Standard & Poor's said it lowered its corporate credit rating on Home Interiors & Gifts Inc. to B from B+ and assigned its B bank loan rating and a recovery rating of 2 to Home Interiors' proposed $370 million senior secured credit facility, issued as part of a proposed refinancing.

In addition, S&P lowered its subordinated debt rating on Home Interiors to CCC+ from B-.

The outlook is stable.

S&P said the downgrade reflects Home Interiors' increased debt leverage as a result of the proposed refinancing, in which the company will retire $147 million in preferred stock and accrued dividends.

The agency said the ratings are based on the high level of business risk associated with Home Interiors' direct-sales business model as well as the company's aggressive debt leverage.

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