Moody's upgrades Mueller Water

Moody's Investors Service said it affirmed Mueller Water Products, Inc.'s corporate family rating of B2, probability of default rating of B2 and speculative grade liquidity rating of SGL-3. Moody's also said it upgraded its senior secured credit facility rating to Ba3 from B1 and senior subordinated notes rating to B3 from Caa1.

The outlook remains stable.

The changes to Mueller's senior secured credit facility and senior subordinated notes were made in accordance with Moody's loss-given-default framework. Since Dec. 31, 2008, the company has reduced the size of its revolver to $200 million from $300 million, the agency said, and paid down about $392 million of secured debt with free cash flow and a fourth quarter equity issuance.

The ratings also reflect an expectation that Mueller's credit metrics will remain weak in 2010 due to continued weakness in each of the company's key end markets: residential construction, non-residential construction and municipal water infrastructure, Moody's said.

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