S&P revises Mohawk to 4

Standard & Poor's said it affirmed the BB+ ratings on Mohawk Industries Inc.'s (BB+/positive) 7.2% senior notes due 2012 and 6.125% senior notes due 2016 and revised the recovery ratings to 4 from 3.

The 4 recovery rating indicates expectation of 30% to 50% recovery.

The revised recovery rating reflects lower potential recovery for the senior noteholders because the increased size of Mohawk's new $900 million senior secured revolving credit facility, compared with the prior $600 million facility, results in greater priority claims in the default scenario, according to the agency.

The BB+ ratings reflect the company's strong No. 2 global position in the carpet and floor coverings market, with support from a portfolio of well-recognized brands covering multiple price points and distribution channels, the agency said.

Ratings also reflect Mohawk's vertically integrated operations and diverse customer base, the agency added.

Mohawk's markets are also highly competitive and cyclical (subject to housing construction cycles and variable consumer discretionary spending) with a significant portion of its sales from residential replacement and construction markets, the agency noted.

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