S&P lowers Arclin

Standard & Poor's said it lowered the long-term corporate credit rating on Arclin Canada Ltd. to B- from B and its first-lien senior secured debt to B from B+. The recovery rating is unchanged at 2.

The agency also lowered the second-lien senior secured debt to CCC from CCC+ and the recovery rating is unchanged at 6.

The outlook is negative.

S&P said the downgrade reflects expectations that, given market conditions, Arclin's performance will be weak for the next 1½ years and that the company has a high likelihood of violating its covenant in first quarter of 2009, given the stepdown in the covenant.

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