S&P ups Valhi

Standard & Poor's said it raised the corporate credit rating on Valhi Inc. and its subsidiary, Kronos International Inc., to CCC+ from CCC. The agency also said it raised the ratings on Kronos International's €400 million senior secured notes due 2013 to CCC from CCC-, with a recovery rating of 5, indicating an expectation of 10% to 30% recovery in the event of default.

The outlook is stable.

The upgrade reflects an expectation of strengthening operating trends, which should continue to support an improving financial profile in 2010, S&P said.

Most of this benefit should reflect sequential improvement in volumes within its titanium dioxide business, which should continue to support gradual improvement to the financial profile, albeit from weak levels, the agency said.

Moreover, with limited capacity additions likely in the near term coupled with reduced global capacity, the agency said it expects Valhi should be well positioned to remain profitable and to strengthen its financial profile.

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