S&P cuts Catalyst Paper outlook to negative

Standard & Poor's said it revised the outlook on Catalyst Paper Corp. to negative from stable.

The ratings, including the B+ long-term corporate credit rating on the company, remain unchanged, the agency said, adding that the outlook revision stems from its expectation that Catalyst's profitability and cash flow will decline through 2007 because of weak industry conditions and cost pressures.

According to S&P, the ratings reflect Catalyst's high debt leverage and exposure to the declining North American newsprint market and the cyclical specialty papers and pulp business while these risks are partially offset by its strong market position in newsprint and specialty groundwood papers along the west coast of North America and its improving productivity.

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