Moody’s assigns Georgia-Pacific notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to Georgia-Pacific LLC's proposed senior unsecured notes.

The notes will be unsecured senior obligations of Georgia-Pacific and will rank equally with the company's existing unsecured senior debt.

Proceeds will be used for general corporate purposes including prepayment of existing debt.

The company’s Baa1 senior unsecured and Prime-2 short-term ratings are unchanged and the outlook remains stable.

Moody’s said the Baa1 senior unsecured rating is primarily driven by Georgia-Pacific’s product diversity, leading product market positions, scale and strong leverage and coverage metrics, tempered by the cyclicality of both wood products and market pulp, the secular decline of communications papers and the lack of asset diversity beyond North America.

Following the integration of Buckeye Technologies' dissolving pulp business and the building products assets acquired from International Paper, Moody's expects Georgia-Pacific will generate EBITDA margins of about 20%, debt to EBITDA under 2 times, and retained cash flow to debt of over 40%. As a private company with unpublished financial statements, Georgia-Pacific has less market transparency than most companies in this industry.

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