DBRS drops West Fraser to junk

DBRS said it assigned an issuer rating to West Fraser Timber Co. Ltd. of BB (high) with a negative trend, with the default risk having declined from BBB (low).

The negative trend reflects the fact that the company's ratings remain at risk due to significant headwinds to efforts to stabilize earnings and cash burn, according to the agency.

DBRS also downgraded West Fraser's unsecured debentures to BB (high) from BBB (low) and assigned an RR3 recovery rating.

The downgrade reflects the company's weak financial risk profile, which is not likely to improve in the near term due to continuing weak residential housing market conditions, DBRS said.

The current rating is supported by the company's above-average business risk profile among its forest product company peers, the agency noted.

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