S&P lowers MAAX, rates discount notes CCC+

Standard & Poor's said it lowered its long-term corporate credit and senior secured debt ratings to B from B+ on MAAX Corp. and lowered its senior subordinated debt rating on the company to CCC+ from B-.

The ratings were lowered due to the proposed issuance of $110 million of senior discount notes by MAAX's parent, MAAX Holdings Inc. S&P also assigned a CCC+ debt rating to the proposed new senior discount notes due 2012 and a B corporate credit rating to the parent. The outlook is stable.

Proceeds from the new notes will be used to return capital to the shareholders.

S&P said the ratings on MAAX reflect the company's very aggressive financial policy, high leverage, and high customer concentration in the competitive bathroom fixtures industry. Partially offsetting these risks are the company's attractively positioned product mix and distribution capability, its steady profitability, and its ability to generate free cash flow.

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