MOODY's PLACES LONG-TERM DEBT RATINGS (SR. DEBT AT A3) OF INTERNATIONAL PAPER UNDER REVIEW FOR POSSIBLE DOWNGRADE.
Moody's Investors Service placed the long-term ratings of International Paper Company as well as all of the industrial revenue and pollution supported bonds on review for possible downgrade. At the same time Moody's confirmed the Prime-2 short-term rating of the company. These actions are prompted by the announcement that International Paper has made an all cash tender offer for Shorewood Packaging Corp, and following a prolonged period of pricing constrained operating earnings at International Paper.
Ratings under review for possible downgrade:
International Paper Co. - Notes, Bonds, Debentures, Medium Term Notes, and industrial revenue and pollution control bonds currently rated A3, Shelf P(A3), Junior Subordinated Deferred Interest Debentures - Baa2
Ratings confirmed :
International Paper Co - Short Term Rating - Prime-2
Moody's notes that the A3 rating incorporated the expectation that International Paper would continue in its debt reduction program, and refrain from making debt-financed acquisitions until debt protection measurements had demonstrated sustained improvement. The review is prompted by this planned addition of incremental debt at International Paper, further delaying an improvement in debt protection measurements, which have been weakened from several years of cyclically low industry pricing. Our review will focus on the potential synergies that International Paper can achieve from incorporating Shorewood's facilities into its own operations, and the extent that resulting cash flow, coming on top of improving industry pricing, can restore debt protection measurements in the near term.
International Paper Company, headquartered in Purchase, New York, is a worldwide producer of printing papers, packaging and forest products.
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