S&P drops Abitibi

Standard & Poor's said it lowered its ratings, including the long-term corporate credit rating to B from B+, on Abitibi-Consolidated Inc.

The outlook is negative.

According to S&P, the downgrade is the result of the company's deteriorating profitability amid weak industry conditions.

The agency said that the ratings on Abitibi reflects the company's high debt leverage, exposure to the declining North American newsprint market and the volatile commodity groundwood papers and lumber markets and weak profitability while these risks are partially offset by the company's leading market share position in newsprint and groundwood papers.

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