Moody's rates Longview Fibre notes B1

Moody's Investors Service said it assigned a B1 to Longview Fibre Co.'s proposed senior unsecured notes and affirmed the REIT's Ba3 corporate family rating, Ba2 senior secured debt rating and B2 senior subordinated debt rating. The outlook is stable.

Proceeds of the planned senior note issuance, as well as common equity, will be used to pay the cash portion of the earnings and profits distribution required for REIT conversion, which is anticipated to range between $70 million and $75 million, as well as to tender for Longview Fibre's senior subordinated notes due 2009.

Moody's said the ratings reflect Longview Fibre's progress towards completing its conversion to a REIT, the firm's intention to continue pursuing its established business strategy of operating in the timber, paper, paperboard and converted products segments and its sound credit metrics.

The ratings also incorporate the absence of limitations on additional debt issuances, including secured debt, recent over-harvesting, certain gaps in the age class distribution of standing timber, geographic concentration in Washington and Oregon, a complex legal structure with some structural subordination and moderate customer concentration, the agency said.

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