Fitch ups Georgia-Pacific

Fitch Ratings said it has upgraded Georgia-Pacific LLC's issuer default rating to BB from B+, senior secured revolver to BB+ from BB/RR2, first-lien term loans to BB+ from BB/RR2, guaranteed senior unsecured notes to BB from B+/RR4 and senior unsecured bonds/notes to BB- from B+/RR4.

The outlook has been revised to stable from positive.

Georgia-Pacific continues to outperform Fitch's earnings expectations in the midst of the current recession, which provides primary support for the upgrade. Through the third quarter of 2009 consolidated EBITDA was 25% ahead of the prior year.

Fitch said that the company has also extended the maturity ladder of its debt portfolio and reduced its overall percentage of secured debt.

Fitch expects that in 2010 Georgia-Pacific will regain some of the sales volumes lost in the recession but will also face new cost inflation pressures, particularly in its containerboard, bleached board and overseas tissue operations, which have been benefiting from a weak U.S. dollar.

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