TEXT - S&P rates Clearwater Paper Corp's snr unsecured notes
Jan 17 - Standard & Poor's Ratings Services today assigned its 'BB' issue-level rating (the same as the corporate credit rating) to Spokane, Wash.-based Clearwater Paper Corp.'s proposed $250 million senior unsecured notes. We assigned the notes a '3' recovery rating, which indicates our expectation for meaningful (50% to 70%) recovery in the event of a payment default. We expect proceeds to be used to repay $150 million 10.625% senior secured notes due 2016 and for general corporate purposes. The ratings on Clearwater reflect our expectation for modest top line growth and slightly better EBITDA margins in 2013. Pro forma leverage climbs closer to 3.5x EBITDA, on higher absolute debt levels. However, this higher pro forma leverage estimate remains well within the 3x to 4x range we view to be consistent with Clearwater's "significant" financial risk profile. We also view the paper producer to have a "fair" business risk profile based on its vertical integration and geographic diversity. Still, Clearwater faces competition from larger and better capitalized competitors. For our most recent corporate credit rationale, see our summary analysis on Clearwater published Jan. 4, 2013, on RatingsDirect. Related Criteria And Research -- Issuer Ranking: Global Forest Products Companies, Strongest To Weakest, Jan. 15, 2013 -- Key Credit Factors: Criteria For Rating Companies In The Global Forest Products Industry, Jan. 14, 2013 -- Methodology: Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012 -- Methodology And Assumptions: Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011 Temporary Contact numbers: James Fielding, (1) 917-734-3477; Tobias Crabtree (1) 917-539-4614 RATINGS LIST Clearwater Paper Corp. Corporate credit rating BB/Stable/-- New Ratings Proposed $250 mil sr unsecd notes BB Recovery rating 3
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