S&P rates Ainsworth Lumber notes B+

Standard & Poor's said it assigned a B+ rating to Ainsworth Lumber Co. Ltd.'s $75 million senior floating-rate notes due 2013 and affirmed its B+ long-term corporate credit, senior secured and senior unsecured debt ratings. The outlook is stable.

Proceeds from the new issue will be used to bolster cash reserves and improve liquidity. Ainsworth's capital expenditures will be unusually high in 2006 as the company completes an expansion of its Grand Prairie, Alta. mill and upgrades several of its Minnesota mills.

S&P said the ratings on Ainsworth Lumber reflect the company's aggressive financial profile, narrow product concentration, pricing volatility and the risk of oversupply of its major product, oriented strand board.

These risks are partially offset by the company's strong cost position stemming from its strong asset base, good market position and adequate liquidity, the agency said.

Debt to EBITDA was 2.4x at the end of 2005.

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