Moody's downgrades Sappi

Moody's Investors Service said it downgraded the corporate family rating of Sappi Ltd. to Ba2 from Ba1, as well as its probability of default rating to Ba2-PD from Ba1-PD. Concurrently, the agency downgraded the ratings of instruments issued by Sappi's guaranteed subsidiary Sappi Papier Holding GmbH’s senior unsecured notes (due 2023 and 2026) and senior unsecured revolving credit facility to Ba2 from Ba1 and its senior unsecured notes (due 2032) to B1 from Ba3. The outlook on Sappi and Sappi Papier Holding GmbH remains stable.

“Today's rating action reflects the material deterioration of Sappi's operating profitability, leading to significant pressure on credit metrics such as Moody's-adjusted debt/EBTIDA of around 4x in the twelve months ended December 2019. We believe that Sappi's financial profile is likely to weaken further over the first half of 2020, with uncertain prospects of a material recovery later this year,” said Dirk Steinicke, Moody's lead analyst for Sappi, in a press release

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