S&P ups Lecta to stable

Standard & Poor's said that it revised the outlook on Lecta SA to stable from negative and affirmed all ratings including the B+ long-term corporate credit rating.

The outlook revision primarily reflects Lecta's improved operating and financial performance in 2010, the agency said.

The revision also reflects the group's strengthened liquidity position, which, combined with the expectations of a relatively stable operating environment in 2011, has reduced the risk of underperformance over the near term, the agency added.

The ratings continue to reflect the company's exposure to the cyclical, competitive and challenging European coated woodfree paper market as well as an aggressive financial risk profile, S&P said.

These weaknesses are partly offset by a good market position, including major cost advantages derived from the company's proximity to key end-markets; access to a modern, flexible asset base; and a focused business and financial strategy, the agency said.

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