Moody's drops Inland Fiber

Moody's Investors Service said it lowered the rating of Inland Fiber Group, LLC's $225 million 9 5/8% senior secured notes to Ca from Caa3.

Moody's also said it lowered the company's senior implied and issuer ratings to Ca from Caa3.

The outlook is stable.

The downgrade reflects the recent announcement that the company failed to make the interest payment on its senior secured notes within the required grace period, the agency noted.

The Ca rating also reflects Moody's view that with current markets prices of under $400 per thousand board feet of timber, the asset value of the company's remaining merchantable timber would be insufficient to meet the company's obligations under the senior secured notes at maturity in 2007 and that investors may experience a material loss of principal, the agency added.

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