MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it lowered its corporate credit rating on Cascades Inc., an integrated packaging and tissue company that makes, converts, collects and processes recycled paper, to 'BB-' from 'BB', reflecting the company's deteriorating financial risk profile and high leverage.
S&P said the outlook is negative, reflecting S&P's expectations that Cascades' profitability will remain under pressure despite recently announced price increases in all key segments and the boxboard division will likely remain a drain on the company in the near term.
S&P said it also lowered the issue-level ratings on Cascades' senior secured debt, to 'BB+' from 'BBB-' and senior unsecured debt, to 'B+' from 'BB-' reflecting Cascades' highly leveraged capital structure, weak profitability and exposure to cyclical boxboard, containerboard, and tissue prices and volumes.
The risks are partly mitigated by a diverse revenue stream and vertical integration, S&P said.
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S&P said the outlook is negative, reflecting S&P's expectations that Cascades' profitability will remain under pressure despite recently announced price increases in all key segments and the boxboard division will likely remain a drain on the company in the near term.
S&P said it also lowered the issue-level ratings on Cascades' senior secured debt, to 'BB+' from 'BBB-' and senior unsecured debt, to 'B+' from 'BB-' reflecting Cascades' highly leveraged capital structure, weak profitability and exposure to cyclical boxboard, containerboard, and tissue prices and volumes.
The risks are partly mitigated by a diverse revenue stream and vertical integration, S&P said.
tfn.newsdesk@thomson.com alo/alo COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.