Moody's: Riverside Forest notes B2

Moody's Investors Service said it assigned a B2 rating to Riverside Forest Products Ltd.'s new US$150 million issue of senior unsecured notes due 2010 and also assigned to Riverside a senior implied rating of B2 and a senior unsecured issuer rating of B2.

The outlook is stable.

Moody's said the rating is based on the pro forma financials of Riverside following its acquisition of Lignum Ltd. for C$90 million in cash and C$10 million in stock. Lignum is a privately held British Columbia-based lumber manufacturing, sales and distribution company.

The B2 rating reflects Riverside's position in the B.C. plywood and veneer markets, the cost effectiveness of its mills, its access to fiber, its favorable power supply situation through its ownership of two wood-waste fired cogeneration plants, and its proven ability to generate cash flow throughout the business cycle.

Moody's said the rating also considers the susceptibility of the company to the cyclicality in the forest products industry, the impact of changes in the U.S./Canadian dollar exchange rate, and the impact of the U.S. softwood lumber tariff and the uncertainty surrounding its resolution.

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