S&P rates Harbinger notes B

Standard & Poor's said it affirmed its B corporate credit rating on Harbinger Group Inc. The outlook is stable.

At the same time, the agency said it assigned a B issue-level rating and 3 recovery rating to the group's proposed $650 million 8% senior secured notes due 2017. The 3 recovery rating indicates an expectation of meaningful recovery for creditors in the event of a payment default or bankruptcy.

S&P said the ratings reflect its analysis that the company's creditors will remain structurally subordinated to the liabilities of its current and future operating subsidiaries. The ratings also reflect the agency's view that Harbinger's operating portfolio lacks diversification, though it is expected to slowly improve through future acquisitions, and that management has a limited track record with its stated investment strategy of seeking controlling equity stakes and maintaining ownership over an extended time horizon.

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