S&P affirms Appvion on segment sale

Standard & Poor’s said it affirmed the B corporate credit rating on Appvion Inc.

The outlook is negative.

Appvion recently announced the sale of its growing, high-margin micro-encapsulation business for $206 million, S&P said.

The company used $165 million of the proceeds to pay down first-lien debt, the agency said.

The ratings reflect a view that this sale is credit-neutral, S&P said.

Appvion lost a growing and profitable, albeit small, business segment, the agency said, but received an attractive multiple that enabled it to pay-down debt and improve overall liquidity.

Appvion will be a smaller, less-diversified company, but should benefit from the ability dedicate more resources toward improving the profitability of its core carbonless and thermal paper segments, S&P said.

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