S&P affirms Sappi at BB-

Standard & Poor’s said it affirmed its BB- long-term and B short-term corporate credit ratings on Sappi Ltd. The outlook is stable.

S&P also affirmed the recovery rating of 2 and the issue rating of BB on the group’s $400 million senior secured notes due in 2017, its $350 million senior secured notes due in 2021, its €465 million revolving credit facility due in 2020 and its €450 million senior secured bonds due in 2022, issued by Sappi's 100%-owned subsidiary Sappi Papier Holding.

Finally, S&P affirmed the B issue rating on $250 million senior unsecured notes issued by Sappi Papier Holding, which are due in 2032. The recovery rating on the senior unsecured debt is unchanged at 6, indicating an expectation of negligible (0%-10%) recovery in the event of a payment default.

S&P said Sappi continues to experience long-term structural declines and difficult trading conditions in some of its paper markets, resulting in contracting revenues and pressure on its EBITDA. S&P said it expects that the group will be able to slightly improve its credit metrics in the financial year ending Sept. 30, 2016 by staying focused on cost efficiencies, gradually strengthening its margins, and reducing debt.

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