S&P ups Domtar

Standard & Poor's said it raised the long-term corporate credit rating on Domtar Corp. and its subsidiary Domtar Inc. to BBB- from BB+, along with the rating on its senior unsecured debt to BBB- from BB. The agency also said it affirmed its BBB issue-level rating on the senior secured debt, reflecting a view that the secured debt is well collateralized. The recovery ratings were removed as these issue-level ratings are now investment grade, S&P said.

The outlook is stable.

The upgrade reflects Domtar's significant debt reduction and good operating performance, the agency said.

The ratings also consider its leading market position in the North American uncoated free sheet market, good cost profile and low leverage, the agency said.

These strengths are offset in by a steady decline in product demand and volatile prices for commodity pulp, S&P said.

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