Fitch affirms Sappi

Fitch Ratings said it affirmed Sappi Manufacturing (Pty) Ltd.'s national long-term senior unsecured AA-(zaf) and national short-term F1+(zaf) ratings.

The outlook for the national long-term rating is stable.

The affirmation reflects the company's consistent financial performance since fiscal 2005, Fitch said. This has been supported by higher pulp prices and strong demand for pulp and paper products locally and offshore and for chemical cellulose from offshore markets, according to the agency.

The outlook is based on positive financial projections for fiscal 2008 to fiscal 2010 given the increasing debt profile relating to the expansion of its chemical cellulose Saiccor mill, Fitch said. The company's adjusted net debt-to-operating EBITDAR ratio is projected to increase to 1.6 times for fiscal 2008 and decline substantially in following years, the agency said.

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