Moody’s ups Verso Paper

Moody's Investors Service said it upgraded Verso Paper Holdings LLC's corporate family rating to B3 from Caa3, probability of default rating to B3-PD/LD from Caa3-PD and various credit facility and debenture ratings.

At the same time, the agency assigned a B3 (LGD4) rating to the company's new $650 million senior secured notes due 2019, Caa1 (LGD5) rating to its $178 million second-lien notes due 2020 and Caa2 (LGD6) rating to its $63 million subordinated notes due 2020 that were issued in connection with the company's Jan. 7 debt exchange and consummation of the NewPage Corp. acquisition.

Verso's probability of default rating reflects the roughly $122 million and $39 million principal reduction on the company's second-lien and subordinated notes, respectively, set forth in the debt exchange. In about three days, the LD (limited default) designation will be removed and the probability of default rating will be B3-PD.

The outlook was changed to stable.

Moody’s said the action reflects its view that the acquisition of NewPage will improve Verso's credit profile and concludes the review for Verso and NewPage that was initiated on Jan. 8, 2014.

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