S&P ups Associated Materials

Standard & Poor's said it raised its corporate credit ratings on AMH Holdings LLC and its operating subsidiary, Associated Materials LLC, to B- from CCC+, along with its senior secured second-lien notes due 2016 to B from CCC with the recovery rating revised to 2, reflecting an expectation for 70% to 90% recovery in the event of default, from 5. The agency also said it raised the rating on AMH Holdings' senior discount notes due 2014 to CCC from CCC-. The recovery rating remains 6, reflecting an expectation of 0% to 10% recovery in the event of a default.

The outlook is stable.

All of the ratings were removed from CreditWatch, where they were placed with positive implications in April. AMH depends on cash flow from Associated Materials to meet its debt obligations, so the agency said it considers them a consolidated enterprise.

The upgrade follows better than previously anticipated improvement in Associated Materials' operating conditions as a result of a gradual recovery in its residential end markets, S&P said.

The agency said it expects end-market demand for its siding and window products to modestly improve from depressed levels in 2010 because of expectations for a modest boost in repair and remodeling spending from 2009's depressed level.

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