Moody's ups Mueller, rates discount bond Caa1

Moody's Investors Service said it upgraded the long-term senior secured debt ratings of Mueller Group LLC to B1 from B2 and senior secured subordinated debt rating to B3 from Caa1.

Upgrades include Mueller Group's senior secured bank credit facility to B1 from B2 and 10% senior secured subordinated bond/debenture due 2012 to B3 from Caa1.

Moody's also assigned to Mueller Water Products, Inc. a B1 corporate family rating and a Caa1 rating to the 14.75% senior unsecured discount bond/debenture due 2014.

The outlook is stable.

The key factors influencing the upgrade include debt reduction following the completion of Mueller's IPO, which provided $432 million for debt reduction.

Moody's said Mueller's ratings also capture its strong North American market position and consistent free cash flow generation, offset by Moody's expectation that margins could be challenged by raw material cost inflation.

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