Moody's rates Abitibi

Moody's Investors Service assigned Abitibi-Consolidated Inc. a speculative grade liquidity rating of SGL-3.

The outlook is negative.

Moody's said the SGL-3 rating indicates adequate liquidity and is supported by the company's committed sources of financing, mainly the availability under its $800 million revolving credit facility together with a $500 million accounts receivable facility and expectations of improving cash flow as commodity prices recover from a prolonged trough.

However, the SGL rating also reflects Abitibi's recent trend of negative free cash flow and uncertainties concerning the magnitude and sustainability of the commodity price recovery, according to Moody's.

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