S&P: Mercer outlook negative

Standard & Poor's said it revised the outlook on Mercer International Inc. to negative from stable and affirmed its B corporate credit rating.

The outlook revision reflects uncertainties regarding Mercer's financial performance over the next several quarters because of the volatile pulp price environment, inventory oversupply and the global economic slowdown, according to the agency.

Ratings reflect the company's limited product diversity, high debt leverage, vulnerability of earnings and cash flow to changes in input costs and foreign-exchange rates and participation in the highly cyclical, fragmented and competitive pulp industry, the agency said.

The company operates relatively modern facilities and efficient pulp mills and has a good track record with capital expansion projects and cost reductions, the agency noted.

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