S&P affirms Headwaters

Standard & Poor's said it affirmed its BB- senior secured bank loan and 2 recovery ratings on Headwaters Inc.'s $700 million credit facility and removed them from CreditWatch, where they were placed with positive implications on June 20.

The agency said that the ratings on the bank facility had been placed on CreditWatch with the expectation that the note proceeds would be used to reduce the company's term loan.

"The rating actions follow the company's announcement that it did not complete the debt offering," said S&P credit analyst Pamela Rice.

The agency noted that the ratings on Headwaters reflect meaningful business risks, including an aggressive acquisition strategy, an alternative energy business whose prospects are uncertain and cyclical demand for its products, adding that these factors overshadow Headwaters' strengths, including its favorable position within selected niche businesses, healthy operating margins, moderate capital spending requirements and demonstrated willingness to issue equity to help fund growth.

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