S&P rates White Birch revolver B+, notes B

Standard & Poor's said it assigned its B corporate credit ratings to White Birch Paper Co. and its wholly owned subsidiary, White Birch Paper Finance Inc. The outlook is positive.

In addition, S&P assigned its B+ bank loan rating and its 1 recovery rating to White Birch's proposed $70 million senior secured revolving credit facility due 2010.

S&P also assigned its B senior unsecured debt rating to the combined $400 million of senior unsecured notes. The proposed issuance will consist of fixed-rate notes due 2015 and floating-rate notes due 2012.

White Birch will be indirectly owned 75% by Peter Brant, 12.5% by Aby Rosen and 12.5% by Michael Fuchs and will acquire a 100% interest in Stadacona Inc., Bear Island Paper Co. LLC (B-/Watch Positive/--) and F.F. Soucy Inc. (not rated). All three companies will become direct or indirect subsidiaries of White Birch.

The $400 million of expected note proceeds will be used to refinance debt at the acquired companies and buy out existing partners.

At the same time, the B corporate credit rating and other ratings on Stadacona were affirmed and removed from CreditWatch. The outlook on Stadacona is stable.

Bear Island Paper Co. ratings remain on CreditWatch until the transaction is complete.

S&P said the ratings on White Birch reflect limited product diversity with a primary focus on the highly cyclical commodity newsprint market and aggressive debt levels.

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