S&P raises Tempur-Pedic

Standard & Poor's said it raised its corporate credit ratings on Tempur-Pedic International Inc. to BB from BB-.

The ratings were removed from CreditWatch where they were placed on Dec. 20, reflecting the company's continued strong operating performance and planned debt redemption, the agency said.

The outlook is positive.

The upgrade is based on Tempur-Pedic's good operating performance and sustained growth, which has resulted in the maintenance of strong credit measures, S&P said, noting that the company has been successful with new product offerings and with expanding its distribution footprint and has generated good free cash flow.

The ratings on Tempur-Pedic reflect its strong positioning as an alternative to traditional bedding products, its geographic and channel diversification and favorable industry conditions, the agency noted, adding that somewhat offsetting these factors are the company's narrowly focused position within the competitive mattress industry and its exposure to raw material cost volatility.

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