Moody's rates Sino-Forest bond Ba2

Moody's Investors Service assigned its Ba2 senior unsecured rating to Sino-Forest Corp.'s proposed bond issuance and a Ba2 senior implied rating to Sino-Forest with a stable outlook.

Moody's said the rating reflects six core credit strengths, including Sino-Forest's first-mover advantage and competitive position in China's forestry plantation industry, the favorable trend evident in wood products demand and supportive government policies, the company's proven scalability through acquisitions spearheaded by experienced management team with proven track record in managing and expanding commercial plantations in China, its systematic application of advanced planting management practices and strong R&D capabilities to raise plantation yields and returns, the strategic locations of its plantations together with its sound relationships with local forestry bureaus and plantation service providers.

The providers enhance its competitive advantages and strong and improving financial metrics with adjusted total debt to EBITDA ratio improved to 2.2x in 2003 from 5.5x in 2001, whereas EBITDA interest coverage ratio strengthened to 6.6x from 5.4x during the same period.

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