October 25, 2012 / 10:46 AM / 5 years ago

TEXT-S&P revises Stora Enso outlook to neg on weakening financials

(The following statement was released by the rating agency)

Oct 25 -


-- We expect the highly cyclical forest products industry to continue to face rapidly falling paper demand and a weakening economic environment in Europe.

-- Stora Enso is making large investments that, given its weak operating cash flows, could weaken the balance sheet and credit metrics.

-- We are revising our outlook on Stora Enso to negative from stable and affirming ‘BB/B’ and ‘K-4’ ratings on Stora Enso.

-- We are withdrawing the ‘BB/B’ ratings on Stora Kopparbergs Bergslags AB at its request.

-- The negative outlook reflects the uncertainty related to the operating cash flow generation during a period of large investments.

Rating Action

On Oct. 25, 2012, Standard & Poor’s Ratings Services revised its outlook on Finland-based forest products group Stora Enso Oyj to negative from stable. At the same time, we affirmed all of our ratings on Stora Enso, including the ‘BB/B’ long- and short-term corporate credit ratings and the ‘K-4’ Nordic national scale rating.

We also withdrew the ‘BB/B’ ratings on Stora Kopparbergs Bergslags AB at Stora Kopparberg Bergslags’ request.

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