S&P rates Kronos add-on BB-

Standard & Poor's said it assigned its BB- rating to Kronos International Inc.'s proposed €90 million senior secured notes issue, an add-on to the company's existing €285 million 8.875% senior secured notes due June 2009.

At the same time, S&P affirmed its BB corporate credit ratings for Valhi Inc. and Kronos and revised the outlooks to negative from stable. Kronos is a majority owned indirect subsidiary of Valhi.

Proceeds from the transaction will be distributed to Kronos Worldwide Inc., the direct parent of Kronos, to pay off intercompany notes to affiliates NL Industries Inc. and Valhi.

S&P said it expects that the security will provide only limited protection to the noteholders, who are structurally subordinated to the claims of creditors at key operating subsidiaries. Ratings on Kronos also reflect its strategic importance to, and the credit quality of, its ultimate parent, Valhi Inc.

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