S&P affirms Leiner

Standard & Poor's said it affirmed its ratings, including the B- corporate credit rating, on Leiner Health Products Inc.

The agency said that the B- bank loan rating on the company's $290 million senior secured credit facilities, at the same level as the corporate credit rating, was affirmed and the 3 recovery rating.

S&P noted that it removed the ratings from CreditWatch while ratings were originally placed on CreditWatch with negative implications on March 23, following the company's announcement that it had voluntarily suspended the production and distribution of all over-the-counter products manufactured, packaged, or tested at its facilities in the United States because of U.S. Food and Drug Administration observations about product quality and deficiencies upon inspection of one facility.

The outlook is negative.

According to the agency, the ratings on Leiner reflect the company's highly leveraged capital structure, customer concentration, lack of pricing flexibility in the highly competitive private-label vitamin market and the segment's vulnerability to adverse publicity.

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