TEXT - S&P rates Clearwater Paper Corp's snr unsecured notes

Thu Jan 17, 2013 11:12am EST

Related Topics

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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