S&P cuts Stora Enso Oyj

Standard & Poor's said it revised its long-term ratings on Stora Enso Oyj to BBB- from BBB following a reassessment of the company's business and financial risk in light of challenging paper market conditions.

At the same time, the agency said that the A-3 short-term rating was affirmed.

The outlook is negative.

The rating action follows a review of the European forest product industry while it also reflects higher business risk as a result of structural challenges in the coated fine paper grades, sustained cost inflation and an uncertain outlook for paper pricing and demand in light of softening economic growth, the agency said.

According to S&P, more than one-half of Stora Enso's earnings are derived from the challenging publishing and printing segments and this exposes the company to cyclical demand volatility in a situation in which economic growth in the key European and North American markets is set to slow.

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