Moody’s revises Sappi view to positive

Moody's Investors Service said it changed the outlook on all ratings of Sappi Ltd. and its subsidiary Sappi Papier Holding GmbH to positive from stable.

Concurrently, Sappi's Ba3 corporate family rating and Ba3-PD probability of default rating, as well as the ratings of the various financial instruments at Sappi Papier, including the Ba2 senior secured notes and credit facilities and B2 senior unsecured notes, were affirmed.

"Today's outlook change to positive reflects the track record in financial performance and improved resilience of Sappi's business model over the past years despite challenging economic conditions as well as our expectation of sustainability in recent performance improvements, that should enable the group to achieve and maintain credit metrics in line with a Ba2 rating over the next 12-18 months," Matthias Volkmer, Moody's vice president, senior credit officer and lead analyst for Sappi, said in a news release.

"We note that Sappi's focus on deleveraging has reduced the debt burden by about 32% since 2009 while the company implemented sizable restructuring measures in its paper and pulp operations.

“We expect that Sappi's transformation towards a more diversified business composition including the continued expansion of its Dissolving Wood Pulp (DWP) and Specialty Paper Operations as well as new business areas (nano cellulose) will incorporate sizeable investments but understand that management is committed to achieving its leverage target in the medium-term and maintain it thereafter."

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