Moody's ups Ainsworth ratings

Moody's Investors Service said it raised the senior implied rating of Ainsworth Lumber Co. Ltd. to B1 from B3 and changed the rating on the company's US$210 million senior unsecured notes to B1 from prospective B1.

The outlook is stable.

Substantially all of Ainsworth's prior note issues (US$184.6 million and US$89.1 million senior secured notes both due July 15, 2007) were submitted into the company's tender and consent offer. Consequently, the new US$210 million senior unsecured notes are essentially the company's only publicly traded debt.

Moody's said Ainsworth also entered into a new five-year C$50 million revolving credit facility. The rating upgrade is based on the successful completion of the refinancing, increased financial flexibility, and stronger recent results.

The ratings remain constrained by Ainsworth's highly leveraged capital structure and the company's relative lack of product and geographic diversity and lack of size in comparison to key competitors in the very volatile oriented strandboard market.

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