Moody's lowers Stora Enso

Moody's Investors Service said it downgraded to Ba1 from Baa3 the senior unsecured rating for Stora Enso Oyj and assigned a Ba1 corporate family rating.

The P-3 short term rating has been changed to not prime, Moody's said, adding that the outlook has been changed to stable.

"Despite the sizable cash proceeds from the disposal of the merchant business and the North American communication paper operations, which have both strengthened the capital structure by reducing debt by €1.6 billion (pro forma the Papyrus divestment) over the last six months, Moody's has noted a fundamental deterioration of Stora Enso's earnings power and cash flow generation over the past years and believes that these are a result of secular trends that are likely to exert continued pressure on the company's financial profile," said Martin Kohlhase, a Moody's assistant vice president and lead analyst for the paper and forest products industry in EMEA.

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