Moody's rates Ainsworth notes B2

Moody's Investors Service said it assigned a B2 rating to Ainsworth Lumber Co. Ltd.'s proposed $450 million new note issues, including $150 million senior unsecured floating-rate notes and $300 million senior unsecured notes.

The new notes are being issued to fund Ainsworth's $457.5 million purchase of Potlatch Corp.'s oriented strandboard assets and will rank equally with Ainsworth's existing senior unsecured notes.

Accordingly, the ratings on the existing $320 million 6.75% senior unsecured notes, as well as Ainsworth's senior implied and issuer ratings, were downgraded to B2 from B1. The outlook is stable.

The B2 ratings reflect the company's increased leverage as a consequence of the acquisition, relatively modest size, limited product diversity, and the extremely volatile pricing of its core OSB product line.

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