Moody's may cut Domtar, shelf rated Baa3

Moody's Investors Service said it placed the Baa3 senior unsecured debt rating of Domtar Inc. on review for possible downgrade.

Concurrent with the decision to place the ratings on review for possible downgrade, the company's new $500 million shelf was rated prospective Baa3.

Moody's said the rating action reflects ongoing financial performance that generates credit protection metrics that lag those appropriate for the rating, together with concerns about the magnitude and duration of the ongoing commodity price recovery for the company's key product, uncoated woodfree papers.

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