S&P cuts Domtar secured notes to BB

S&P said it downgraded Domtar Corp.'s senior secured notes to BB from BB+ and revised the recovery rating to 3 from 2 following the announced completion of its acquisition of Resolute Forest Products. The 3 recovery rating meaningful (50%-70%; rounded estimate of 65%) recovery in default.

“The capital structure upon close of the acquisition includes a higher proportion of secured claims than was previously the case and contributes to weaker recovery prospects, in our view. Our other ratings on the company, including our BB long-term issuer credit rating, with a negative outlook, and our BB issue-level rating on the company's unsecured notes, are unchanged,” S&P said in a press release.

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