Fitch Withdraws Ratings for Valhi Inc.; Affirms 'CCC' for Kronos International Inc.

Fitch Ratings has withdrawn the 'CCC/RR4' rating on Valhi, Inc.'s (NYSE: VHI) $85 million senior secured revolving credit facility at the company's request given that the company has terminated the facility. Fitch did not rate any other debt issued by Valhi and therefore withdraws the Issuer Default Rating (IDR) of 'CCC'.

Valhi is a holding company with direct and indirect ownership stakes in NL Industries, Inc., Kronos Worldwide, Inc.(NYSE: KRO), CompX International, Inc. (manufacturer of component products) and Waste Control Specialists (provider of hazardous waste disposal services).

Fitch affirms the ratings of Kronos International Inc. as follows:

--Issuer Default Rating (IDR) at 'CCC';

--Eur 80 million senior secured revolving credit facility due May 26, 2011 at 'B+/RR1';

--Eur 400 million senior secured notes due April 15, 2013 at 'CCC/RR4'.

The Rating Outlook is Negative.

The Negative Outlook reflects Fitch's view that trading conditions could deteriorate. Operating EBITDA for the 12 months ended June 30, 2009 was a negative $3.5 million and Fitch does not expect the company to be free cash flow positive for 2009.

The ratings reflect tight liquidity and high financial leverage at Kronos International and Kronos Worldwide's strong market position in the TiO2 industry (fifth largest globally). Fitch notes that Kronos International has obtained an amendment to its subsidiaries' revolving credit which limits availability to Eur 51 million until the obligors evidence compliance with covenants through March 31, 2010 and provide evidence that the obligors' loss before taxes for the financial year ending Dec. 31, 2009 has not exceeded $56 million.

Kronos International is Europe's second largest producer of TiO2 pigments. The company is a wholly owned subsidiary of Kronos Worldwide, a holding company which has additional ownership interests in certain North American TiO2 producers. TiO2 pigments are used in paints, paper, plastics, fibers and ceramics.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.