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S&P: Abitibi-Consolidated off watch
Standard & Poor's said it removed Abitibi-Consolidated Inc., a subsidiary of AbitibiBowater Inc. (B-/negative), from CreditWatch with negative implications, where it was placed March 10.
The ratings, including the B- long-term corporate credit ratings, on Abitibi-Consolidated, parent AbitibiBowater and sister company Bowater Inc. (B-/negative), are unchanged, the agency said.
The outlook on all three companies is negative.
S&P noted that it removed the ratings from CreditWatch because Abitibi-Consolidated was successful in refinancing upcoming debt maturities, alleviating significant near-term liquidity pressure.
The refinancing means that Abitibi-Consolidated has only a small debt maturity in 2008, the agency said, noting that the rating on AbitibiBowater reflect the company's participation in the declining newsprint market, its highly leveraged capital structure and weak cash flow generation.
These risks are partially offset by its leading market position in the newsprint market and expectations that synergies and high-cost mill closures could lead to improved profitability, S&P noted.
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