S&P affirms Chesapeake

Standard & Poor's said it assigned its preliminary BB senior unsecured and B+ subordinated debt ratings to Chesapeake Corp.'s $300 million shelf registration. At the same time, S&P affirmed its BB corporate credit rating on the company.

The outlook is stable.

The ratings reflect industry overcapacity, limited product diversity, competitive pricing pressures, modest levels of discretionary cash flow and aggressive debt leverage, S&P said.

These factors are partly offset by a leading position in European specialty packaging markets, a value-added product mix, diverse and relatively stable end-use markets, good customer diversity and some ability to pass on raw-material cost increases, the agency noted.

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