S&P drops Walter, assigns loan B+

Standard & Poor's said it assigned its B+ senior secured debt rating and 3 recovery rating to Walter Industries Inc.'s $625 million secured bank credit facility.

At the same time, the agency said it lowered its corporate credit rating on Walter Industries to B+ from BB- and its subordinated debt rating to B- from B.

The agency added it removed the ratings from CreditWatch, where they were placed on June 20, with negative implications.

S&P said the rating actions on Walter follow the completion of its review of the terms and conditions of the company's $1.9 billion acquisition of Mueller Group Inc.

The ratings on Walter Industries Inc. reflect S&P's weak business risk assessment of its restricted subsidiaries and highly leveraged balance sheet, as well as the strong linkage between it and its unrestricted subsidiaries, Mueller Water Products Inc. (B+/negative) and Mueller Group LLC (B+/negative).

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