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Moody's revises White Birch view to developing
Moody's Investors Service said it affirmed White Birch Paper Co.'s ratings, including the B2 corporate family rating, the B2 rating on the $275 million guaranteed first-lien senior secured term loan B, the B3 rating on the $125 million guaranteed second-lien senior secured term loan C, the B1 rating on the $70 million guaranteed senior secured bank revolver and the SGL-3 speculative grade liquidity rating.
The outlook was changed to developing from stable following the announcement that Papier Masson Ltee and White Birch Paper Co. have reached an agreement for the acquisition of all of the outstanding shares of Papier Masson by an affiliate of White Birch. The transaction is scheduled to close in the first quarter of 2006.
The developing outlook reflects uncertainty as to White Birch's ultimate relationship with Papier Masson, the potential impact on the credit profile of the company after the acquisition and the anticipating timing of the process, the agency said.
Moody's said White Birch's rating reflects its reliance on a single commodity product, newsprint, and the challenges continuing to impact the paper sector such as over capacity, weak demand, higher input costs, significant competitive pressures and a challenging foreign exchange environment for Canadian producers.
The ratings also reflect the improved price environment for newsprint at this time, adequate liquidity and a relatively low cost position, the agency said.
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