S&P downgrades Spectrum

Standard & Poor's said it lowered Spectrum Brands Inc.'s corporate credit rating to B from B+, senior secured debt rating to B from B+ and senior subordinated debt to CCC+ from B-. The ratings were also removed from CreditWatch with negative implications, where they were placed on Nov. 10.

The outlook is stable.

The downgrade is based on the company's weak operating performance since the fourth quarter of fiscal 2005, which S&P attributed to negative trends in Spectrum's North American and European battery segments and increasing commodity costs, which have pressured margins

S&P said the ratings reflect the company's very aggressive acquisition history, high leverage, operating challenges in its battery segment and integration risks associated with the United Industries and Tetra acquisitions.

These risks are offset somewhat by the company's leading market positions in many of its business segments, the agency said.

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