Moody’s changes West Fraser view to stable

Moody’s Investors Service said it changed West Fraser Timber Co. Ltd.’s outlook to stable from negative and affirmed the company’s Baa3 senior unsecured rating following its stock-for-stock acquisition of Norbord Inc.

“West Fraser’s Baa3 rating has been stabilized because we expect liquidity to be strong and leverage to be low over the next two years as it integrates the operations of Norbord,” said Ed Sustar, a Moody’s senior vice president, in a press release.

West Fraser secured $1.3 billion in committed credit facilities, which may be used to redeem Norbord’s $665 million of bonds, which has a change of control put.

“Given recent trading prices, it is uncertain if Norbord’s bonds will be put. If Norbord’s rated debt is assumed by West Fraser in a manner that leaves Norbord’s bonds essentially pari passu with West Fraser’s senior unsecured notes, Norbord’s bonds will likely be rated in-line with West Fraser’s rating. If this does not occur, Norbord’s bond rating will be based on the stand-alone credit profile of Norbord plus anticipated support from West Fraser (subject to receiving adequate financial information to determine and maintain the Norbord bond rating),” the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.