S&P rates Appleton loan, notes

Standard & Poor's said it assigned its BB bank loan rating and its recovery rating of 3 to Appleton Papers Inc.'s proposed $375 million senior secured credit facility.

At the same time, S&P assigned its BB- senior unsecured debt rating to the company's $150 million senior unsecured notes due 2011 and its B+ subordinated debt rating to the company's $200 million subordinated notes due 2014.

All other ratings, including Appleton's BB corporate credit rating, were affirmed. The outlook is stable.

"The ratings reflect Appleton Papers' aggressive financial profile, declining carbonless paper volumes, expectations for lower operating margins due to a shifting product mix, and potential acquisition risks," said S&P credit analyst Pamela Rice.

These factors are partially offset by leading market shares in certain specialty paper markets, diverse end uses, and relatively stable earnings and cash flows at the Appleton, Wis.-based company.

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