Fitch affirms Valhi, Kronos

Fitch Ratings said it affirmed Valhi Inc.'s BB- issuer default rating and BB- senior secured credit facility and Kronos International Inc.'s BB issuer default rating, BB+ senior secured credit facility and BB senior secured notes. The outlook for both companies is stable.

Fitch said the rating affirmation is driven by the fact that any potentially unmanageable outcome from the judgment for the Rhode Island lead paint case is not likely to affect Valhi severely; however, Valhi as a result could potentially, in a stress case scenario, receive lower or no cash dividends from NL Industries Inc. in the future.

Under such a scenario, Fitch said it expects Valhi would likely need to curtail its own dividend policy. Valhi is a holding company that depends on cash flow from its subsidiaries, of which NL Industries is only one.

Additionally, NL Industries is currently the only entity party to any existing lawsuits as of Dec. 31 and Fitch expects that existing cases, including the Rhode Island case, are not likely to be fully resolved in the near term.

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