S&P rates Domtar notes BBB-

Standard & Poor's said it assigned a BBB- rating to Domtar Corp.'s proposed $250 million senior unsecured notes.

The notes and the guarantees are senior unsecured obligations of Domtar, ranking equally with all of the company's existing and future senior unsecured notes, the agency said.

The proceeds will be used to finance the purchase price of $185 million of various senior unsecured notes that were recently tendered and for general corporate purposes, S&P said.

While this issuance will lead to a slight increase in leverage, the net increase results in immaterial changes to the company's credit metrics, the agency said.

The ratings reflect the company's uncoated free sheet market, good cost profile, low leverage and diversification opportunity through its newly acquired personal care segment, S&P said.

These positive factors are partially offset by a steady decline in demand for uncoated free sheet and volatile prices for commodity pulp, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.