S&P lifts Mueller Water, loan

S&P said it raised its corporate credit rating on Mueller Water Products Inc. to BB from BB-.

The outlook is stable.

At the same time, the agency raised its issue-level rating on the company's senior secured term loan to BB+ from BB. The 2 recovery rating indicates substantial (70%-90%; rounded estimate: 80%) recovery for lenders in the event of a payment default.

S&P said the upgrade reflects an expectation for the company to maintain debt to EBITDA around the 2x area and funds from operations to total debt in the low-30% area over the next 12-18 months.

“Although we believe credit measures are likely to deteriorate over the economic cycle, we believe the company's current and forecasted credit measures provide sufficient cushion to absorb this volatility,” the agency said in a news release.

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