Research Update: Mueller Water Products Inc. Upgraded To 'BB' From 'BB-' On Improved Credit Metrics; Outlook Stable

We expect Mueller's credit measures will continue to improve based on our expectation for growth in residential and municipal spending, and for margins to remain relatively stable in the 20% area over the next 12-18 months. As a result, we are raising our corporate credit rating on Mueller to 'BB' from 'BB-'. At the same time, we are also raising our issue-level rating on the company's senior secured term loan to 'BB+', in line with our raised corporate credit rating. Our '2' recovery rating on the term loan is unchanged. The stable outlook reflects our expectation that improving residential and municipal spending in the U.S., coupled with benefits from cost-efficiency initiatives and continued improvement in pricing, will enable Mueller to

...+ We expect Mueller's credit measures will continue to improve based on our expectation for growth in residential and municipal spending, and for margins to remain relatively stable in the 20% area over the next 12-18 months. + As a result, we are raising our corporate credit rating on Mueller to '##' from '##-'. + At the same time, we are also raising our issue-level rating on the company's senior secured term loan to '##+', in line with our raised corporate credit rating. Our '2' recovery rating on the term loan is unchanged. + The stable outlook reflects our expectation that improving residential and municipal spending in the U.S., coupled with benefits from cost-efficiency initiatives and continued improvement in pricing, will enable Mueller to modestly grow EBITDA over the next 12 months....

Research Update