Moody's upgrades some Smurfit Kappa notes

Moody's Investors Service said it moved the Ba3 corporate family rating from Smurfit Kappa Holdings plc to Smurfit Kappa plc, affirmed Smurfit Kappa Funding plc's senior notes at B2 (LGD6, 93%) and upgraded Smurfit Kappa Funding's senior subordinated notes due 2015 to B2 (LGD95%, LGD6) from B3, Smurfit Kappa Treasury Funding Ltd.'s Yankee bond due 2025 to Ba2 (LGD3, 39%) from Ba3 and Smurfit Kappa Holdings' senior PIK notes due 2015 to B2 (LGD6, 96%) from Caa1.

The outlook is stable.

The rating actions follow the implementation of Moody's loss-given-default methodology to European corporates. The upgrade reflects the significant presence of junior debt in the capital structure, resulting in a one-notch differential between the rating of the senior secured facility and the corporate family rating, the agency said.

The rating actions also follow the successful partial flotation of Smurfit Kappa shares and the application of €1.4 billion of net proceeds to fund a tender offer for the $750 million senior notes due 2012 and €350 million senior notes due 2012, to redeem the €90 million shareholder PIK loan and the upcoming redemption of the remaining €325 million 11.5% senior PIK notes due 2015.

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