S&P drops SP Newsprint

Standard & Poor's said it lowered its corporate credit rating on SP Newsprint Co. to B+ from BB-.

The action followed the company's announcement that it has a definitive agreement under which affiliates of White Birch Paper Co. (B-/negative) would acquire SP Newsprint in an all-cash transaction valued at $350 million, the agency said.

According to S&P, the ratings on SP Newsprint remain on CreditWatch with negative implications, where they were placed on May 17, 2007, following the company's announcement that it was exploring strategic alternatives, including a possible sale of the company.

The agency added that the lower corporate credit rating reflects its expectations for continued challenging market conditions and high input costs in the newsprint industry that will more than offset the effects of capacity closures and price improvements.

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