S&P rates Riverside Forest notes B+

Standard & Poor's said it assigned it B+ long-term corporate credit rating to wood products manufacturer Riverside Forest Products Ltd. and assigned its B+ rating to the company's proposed US$150 million senior unsecured notes.

Proceeds from the notes will be used to repay existing debt and also finance the acquisition of Lignum Ltd., a wood products competitor based in British Columbia, for C$100 million, which includes C$30 million of working capital.

The outlook is stable.

S&P said the ratings on Kelowna, B.C.-based Riverside reflect its narrow product concentration in cyclical wood products, its particular vulnerability as a Canadian producer, and its continuing acquisition strategy. Partially offsetting these risks are the company's low-cost position in the manufacturing of lumber and plywood, some vertical integration in fiber and energy, and an aggressive financial policy offset by adequate liquidity and prudent debt reduction following acquisitions.

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