Moody's ups Ainsworth Lumber

Moody's Investors Service said it upgraded the corporate family rating and probability of default rating of Ainsworth Lumber Co. Ltd. to B3 from Caa2, along with its senior secured term loan to Ba3 from B1 and the company's senior unsecured notes to Caa1 from Caa3. The speculative-grade liquidity rating was affirmed at SGL-3.

The outlook is stable.

The upgrade reflects the company's increased financial flexibility due to improved cash generation following the closure of the company's unprofitable mills and the company's increased focus on value-added products, the agency said.

The company has been able to generate higher margins than industry peers because of its improved mill efficiencies by running its reduced footprint at high operating rates while increasing its mix of value-added product, Moody's said.

The ratings reflect the company's considerable amount of debt, the company's volatile financial and operating performance, relatively small size, single product focus and geographic concentration, the agency said.

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