S&P lowers Rexnord to CC

Standard & Poor's said it lowered its long-term corporate credit rating on Rexnord LLC to CC from B and affirmed the issue-level ratings on the company's debt.

The outlook is negative.

The downgrade follows the company's announcement that it has begun an offer to exchange Rexnord Holdings Inc. pay-in-kind toggle senior notes due 2013 with new 9½% senior notes due 2014. The agency said the downgrade does not reflect a perceived increase in Rexnord's bankruptcy risk but rather the offer to retire debt for less than originally contracted, which S&P considers a de-facto partial restructuring.

S&P will lower the corporate credit rating to SD (selective default) upon completion of the offer.

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