Moody’s could lift Wausau Paper

Moody's Investors Service said it placed the B2 corporate family rating and B2-PD probability of default rating of Wausau Paper Corp. under review for upgrade following the company's announcement that it signed a definitive agreement to be acquired by Svenska Cellulosa Aktiebolaget SCA (SCA, Baa1 stable).

The agency also placed Wausau's B2 senior secured term loan rating under review for upgrade.

The SGL-3 speculative grade liquidity rating is unchanged.

The review follows Wausau's announcement that SCA agreed to acquire Wausau for a total consideration of $687 million, including the assumption of debt of about $174 million. SCA will acquire Wausau shares for $513 million ($10.25 a share or a 40.6% premium to the Oct. 12 share closing price).

Moody’s said the review for upgrade reflects expectations that acquisition by SCA will improve Wausau's credit profile, as the debt will be guaranteed by SCA. Additionally, the acquisition will increase SCA's market share in the North American away-from-home tissue market, while improving Wausau's operational, product and customer diversity, the agency said.

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