S&P rates Reliance BB+, lifts notes

Standard & Poor's said it assigned its BB+ long-term corporate credit rating to Reliance Intermediate Holdings LP and subsidiary Reliance LP, taking into account the entities' consolidated credit profile. The outlook is stable.

At the same time, the agency said it raised its issue-level rating on Reliance LP's senior secured notes to BBB from BBB- and assigned its 1 recovery rating to the debt, indicating an expectation of very high recovery in the event of a default.

In addition, the agency said it raised its issue-level rating on Reliance Intermediate Holdings LP's senior secured notes to BB from BB- and revised our recovery rating on the debt to 5 from 4. A 5 recovery rating indicates an expectation of modest recovery if a default occurs.

"The ratings on Reliance Intermediate Holdings LP and Reliance LP reflect what Standard & Poor's views as the company's strong business risk profile, characterized by the solid market position and stable cash flows from its water heater rental business, which contributes about three-quarters of the company's 2011 EBITDA," said S&P credit analyst Donald Marleau in a news release.

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