(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.
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.