S&P lowers Verso outlook to stable

Standard & Poor's said it revised its outlook on Verso Paper Holdings LLC to stable from positive while all ratings, including its B corporate credit rating, were affirmed.

The outlook revision reflects S&P's assessment that due to weaker-than-expected end-market demand and the likelihood of lower selling prices in the near term, the company's debt reduction initiatives will not likely be met.

As a result, a higher rating is not likely to occur within its outlook time horizon, the agency said, adding that previously, a higher rating was predicated upon prospects for the company's financial profile to improve further as a result of benefits realized from sales price increases and cost-improvement initiatives.

However, the agency said it believes that earnings over the next several quarters will likely decline modestly, given the effects of the economic weakness on end-market demand and its expectation for lower sales prices.

Still, the agency said it expects credit measures to remain in-line for the current rating with total debt to EBITDA of in the 5.5x-6x range.

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