Moody's rates Resolute Forest notes Ba3

Moody's Investors Service said it assigned a Ba3 (LGD 4, 58 %) rating to Resolute Forest Products Inc.'s proposed $600 million senior unsecured notes maturing 2023.

The company's Ba3 corporate family rating, Ba3-PD probability of default rating and SGL-1 speculative-grade liquidity rating are affirmed.

The outlook was changed to positive from stable.

The proceeds from the note offering will be used to repay the company's $501 million existing senior secured notes due 2018, including financing fees and breakage costs.

The company's pro forma adjusted leverage will increase slightly following the re-financing, however, this is expected to be offset by the company's improved interest coverage, Moody's said.

The positive outlook reflects expectations of improved financial performance, supported by higher earnings from its wood-products segment due to the recovery in U.S. housing starts, the agency said, as well as the impact of the company's power projects and cost saving initiatives.

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