S&P lowers Durango

Standard & Poor's said it lowered Corporación Durango SAB de CV's corporate credit rating to CCC- from CCC+.

The outlook is negative.

S&P said the downgrade reflects the continued weakness in financial results through the first half of 2008 and expectations that the company will continue to be unable to fully pass on its increasing raw material and energy costs to its final customers despite planned price increases.

The rating also reflects its highly leveraged financial risk profile and the natural risk associated with the paper industry's cyclicality, the agency said.

These negatives far outweigh the company's leading position in the containerboard and packaging industry in Mexico and its vertical integration, according to the agency.

The issuer's total debt-to-EBITDA ratio for the 12 months ended June 30 was 8.8 times.

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