Moody's may cut Sappi

Moody's Investors Service said it placed on review for downgrade the Ba1 corporate family rating of Sappi Ltd. as well as the Ba1 ratings of Sappi Papier Holding GmbH, the $500 million global bonds 2012 and $250 million global bonds 2032.

Although Sappi's reported group operating performance in the first fiscal half of 2008 improved over the same period last year, Sappi's core fine paper operations in Europe and North America remain weak, the agency said, and a number of factors, such as cost inflation and continued weak pricing, add pressure particularly in Europe.

The review resulted from a slower pace of improving metrics, Moody's said.

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