S&P reduces Chesapeake, debt

Standard & Poor's said it lowered its corporate credit rating on Chesapeake Corp. to BB- from BB and the senior unsecured debt rating to B+ from BB and subordinated debt rating to B from B+.

The outlook is stable.

S&P said the downgrade of the corporate credit rating reflects industry overcapacity and current soft demand in Europe.

The agency added the ratings on Chesapeake reflect negative to weak discretionary cash flow, aggressive debt leverage, industry overcapacity and competitive pricing pressures.

The ratings also reflect some ability to pass on raw-material cost increases to customers and the diversity of the company's end markets and operations, S&P noted.

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