S&P: Appleton Papers unaffected

Standard & Poor's said its ratings and outlook on Appleton Papers Inc. (BB-/stable) remain unchanged following the company's announcement that it commenced a consent solicitation to change the incurrence test for permitted restricted payments and to allow modifications to the company's ESOP plan documentation under its bond indentures.

The agency added that the restricted payments amendment is required to avoid a technical default when Appleton funds its ESOP stock redemptions as required in June 2006 by the Employee Retirement Income Security Act of 1974.

Appleton remains very aggressively leveraged with debt, including capitalized operating leases and tax-effected pension and post-retirement obligations, to EBITDA of 4.8 times at March 31, S&P noted.

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