Moody's rates Smurfit-Stone loans B2

Moody's Investors Service said it assigned a provisional B2 rating to Smurfit-Stone Container Enterprises, Inc.'s proposed $1.2 billion six-year term loan, along with provisional B2 corporate family and probability of default ratings.

The outlook is stable.

Moody's said it understands that the proposed debt offering will be used to exit bankruptcy in April.

The ratings reflect the company's weak cash flow generation, high adjusted leverage, declining demand for paper-packaging and significant pension obligation, Moody's said.

Although the company operates in the more stable food and beverage end market, demand is expected to remain weak over the rating horizon, the agency said.

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