S&P cuts Evenflo to CCC+

Standard & Poor's said it lowered the corporate credit rating on WP Evenflo Holdings Inc. to CCC+ from B-, first-lien senior secured bank loan rating to B- from B and second-lien senior secured bank loan rating to CCC- from CCC.

The outlook is negative.

S&P said the downgrade is based on the company's very weak liquidity as the company has minimal cash balances and revolver availability, and limited cushion under its financial covenants.

This resulted primarily from the weakening U.S. economy, costs related to a product recall and revolver borrowings the company used to fund an acquisition in 2008, the agency noted.

The rating reflects very weak near-term liquidity, highly leveraged capital structure, low operating margins for a branded consumer products company, potential for adverse publicity for its specialty infant and juvenile product sales, and past operating difficulties, the agency said.

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