S&P affirms Mercer

Standard & Poor's said it affirmed its B- corporate credit rating and issue-level ratings on Mercer International Inc.

At the same time, the agency said it removed the ratings from Creditwatch with negative implications, where they were placed on Feb. 13.

The outlook is negative.

In addition, S&P said it revised its recovery rating on Mercer's senior notes due 2013 to 4 from 3, indicating expectations for average recovery in the event of a payment default.

This action resulted from using a lower enterprise value in its simulated default analysis because the normalized EBITDA is lower than previously thought due to the significant deterioration in pulp prices, the agency said.

"The affirmation reflects its expectation that while Mercer will continue to generate weak operating results because of reduced pulp demand and lower sales prices, the company will maintain sufficient liquidity over the next several quarters," said S&P credit analyst Andy Sookram.

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