Moody's: Verso view negative; rates notes Ba2

Moody's Investors Service said it assigned a Ba2 rating to Verso Paper Holdings LLC's proposed first-priority secured notes due 2014 and revised the outlook to negative from stable.

The agency affirmed Verso Paper Finance Holdings LLC's B2 corporate family rating, SGL-2 speculative grade liquidity rating and Caa1 rating (LGD6, 95% from 93%) on the company's senior unsecured term loan.

Ratings for Verso Paper's senior secured revolving credit facility and second-priority senior secured notes were affirmed at Ba2 and B2, respectively, and the rating for Verso Paper's senior subordinate notes will be lowered to Caa1 (LGD5, 85%) from B3 (LGD4, 69%) when the proposed transaction closes.

The revised outlook reflects the challenging conditions in the coated paper market and the possibility of further deterioration in the company's operating and financial performance, Moody's said.

Verso's B2 corporate family rating reflects the company's relatively low cost asset base and its scale as the second-largest producer of coated papers in North America, the agency noted.

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