Fitch cuts Nine Dragons notes to CCC

Fitch Ratings said it downgraded Nine Dragons Paper (Holdings) Ltd.'s long-term foreign-currency issuer default rating to B from BB-, along with the senior unsecured rating on the $283.75 million notes due 2013 to CCC with recovery rating of RR6 from B+.

The ratings have been placed on rating watch negative.

The downgrade are predicated upon the company's weaker operating performance and financial metrics, reflected by tighter interest coverage and high financial leverage based on its financial performance for the first half of fiscal year 2009.

Fitch also said it has ongoing concerns about the company's ability to manage its capital expenditure plans with appropriate prudence in the context of the current economic environment.

Despite these concerns, the agency said that Nine Dragons' liquidity remained adequate as of Dec. 31.

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