Moody’s lifts Resolute Forest

Moody's Investors Service said it upgraded Resolute Forest Products Inc.'s corporate family rating to Ba3 from B1, probability of default rating to Ba3-PD from B1-PD and senior unsecured notes to B1 from B2.

The speculative grade liquidity rating was affirmed at SGL-1 and Resolute's outlook is stable.

"The upgrade reflects improvement in Resolute's financial and operational performance and our view that leverage (adjusted debt to EBITDA) will remain around 4x over the next 12 to 18 months,” Ed Sustar, senior vice president at Moody's, said in a news release.

Moody’s said that Resolute benefits from strong liquidity and the diversity provided by the company's leading newsprint and specialty papers, pulp, lumber and growing tissue operations.

Credit challenges include the company's exposure to the declining paper business, volatile lumber and pulp pricing and demand, and the execution risks in the company's transformation away from declining grades of paper, the agency added.

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