S&P downgraded Valhi

Standard & Poor's said it lowered the corporate credit rating on Valhi Inc. and its subsidiary Kronos International Inc. to B from B+ and lowered the rating on its €400 million senior secured notes issue due 2013 to B from B+.

The outlook is stable.

According to S&P, the downgrade follows the recent announcement of weak first-quarter operating results related to the company's titanium dioxide business, which reflects a challenging operating environment with weak U.S. demand and higher overall input costs.

The downgrade also accounts for the year-over-year deterioration in operating trends, a weakening of the financial profile and the continued difficult operating environment in the company's core business, the agency said.

Ratings reflect the company's limited business diversity, its exposure to cyclical commodity product cycles and a highly leveraged financial profile, the agency said.

The issuer's total adjusted debt-to-EBITDA ratio was about 6.1 times, as of Dec. 31.

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