S&P lowers Sealy, rates notes BB-, B

Standard & Poor's said it lowered Sealy Corp.'s corporate credit rating to B from B+, its senior secured credit facilities to BB- with an unchanged recovery rating of 1 from BB and its senior subordinated notes to CCC+ with a recovery rating of 6 from B+ with a recovery rating of 4.

S&P also assigned a BB- issue-level rating with a recovery rating of 1 to Sealy Mattress Co.'s proposed seven-year $350 million senior secured notes due 2016 and a B issue-level rating with a recovery rating of 4 to its proposed $177 million senior secured convertible pay-in-kind notes due 2016. Sealy's proposed $100 million asset-based revolving credit facility due 2013 is not rated.

The outlook is stable.

The proceeds will be used to refinance existing debt.

The agency said that given its expectation for a continued weakness in the bedding industry over the next year, it believes there will be further credit metric erosion, although it expects leverage to remain below or close to 7 times over the near term.

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