S&P affirms Bowater

Standard & Poor's said it affirmed its ratings on Bowater Inc., including its BB corporate credit rating, bank loan rating and senior unsecured debt rating.

The outlook is stable.

S&P said the ratings reflect Bowater's high debt burden caused by three years of weak earnings and elevated capital spending, and cyclical, oversupplied markets. These factors outweigh the company's leading market positions in newsprint, pulp, and coated groundwood paper, substantial operating leverage, and valuable timberland holdings. The ratings also incorporate prospects for stronger cash flow generation in the near term.

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