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Published on 10/31/2008 in the Prospect News High Yield Daily.

Moody's might cut UPM to junk

Moody's Investors Service said it placed the Baa3 senior unsecured bonds of UPM-Kymmene on review for possible downgrade.

The agency said the move was prompted by the continued erosion in UPM's profitability in most of its business divisions, an accelerated erosion of operating cash flow generation and potential additional pressures on demand levels given a more severe macroeconomic outlook.

The possible downgrade is likely to be limited to one notch because the company still has a relatively strong business profile with a solid financial flexibility, Moody's noted.

The debt-to-EBITDA ratio was 3.8 times for the 12 months ended in September.


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