S&P: Spectrum Brands unaffected

Standard & Poor's said its rating on Spectrum Brands Inc. (B-/negative) is not affected by the company's announcement that it received a purported notice of default from entities claiming to be the holders of its 8.5% subordinated notes due 2013.

The notice claims that because Spectrum was not in compliance with the minimum requirement of 2 to 1 for the fixed-charge coverage ratio, the company exceeded its capacity for senior secured debt borrowings under the subordinated note indenture. Spectrum and its advisers believe that all existing debt incurred was in compliance with the provisions of the indenture and that no event of default has occurred.

The agency said it will place its ratings for Spectrum on CreditWatch with negative implications if a notice of default is received from either the trustee or holders representing 25% or more of the principal amount of the notes then outstanding.

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