Moody's rates Ainsworth Lumber notes B2

Moody's Investors Service said it assigned a B2 rating to Ainsworth Lumber Co. Ltd.'s new $75 million floating-rate notes due 2013. The B2 corporate family rating and the B2 ratings on Ainsworth's existing notes were affirmed. The outlook is stable.

Proceeds from the new notes will be used to augment liquidity and for general corporate purposes, including funding a portion of the ongoing C$260 million expansion of Ainsworth's Grande Prairie, Alta. facility.

Despite increasing debt by nearly 10%, Moody's said the new issuance bolsters an already strong liquidity position and provides additional downside protection as the company embarks on another expansion initiative.

Ainsworth's B2 ratings are influenced primarily by the company's relatively modest size, product line and geographic concentration, its aggressive financial policies and growth aspirations and the extremely volatile pricing of its core product, oriented strand board, the agency said. The rating also reflect Ainsworth's competitive cost position and superior liquidity arrangements.

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