S&P upgrades Ainsworth, notes

Standard & Poor's said it raised its long-term corporate credit rating on Ainsworth Lumber Co. Ltd. to B from B-.

The outlook is stable.

At the same time, the agency raised its issue-level rating on the company's $315 million senior secured notes one notch to BB- from B+. The recovery rating on the notes is unchanged at 1, indicating an expectation of very high (90%-100%) recovery in a default scenario.

The ratings were removed from CreditWatch with positive implications, where they were placed on Sept. 5, 2013, following a bid by Louisiana-Pacific Corp. to acquire the company, which was ultimately unsuccessful.

"The upgrade reflects our view of improvement in Ainsworth's financial risk profile stemming from its operating performance and voluntary debt prepayments," S&P credit analyst Rahul Arora said in a news release.

This has resulted in improved credit protection measures, including adjusted debt-to-EBITDA of 4.4x and funds from operations (FFO) to debt of 14% for the 12 months ended March 31.

The agency believes the company will sustain metrics on the stronger side of its "highly leveraged" indicative financial ratios over the rating horizon.

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