Moody's: Rock-Tenn view positive, rates notes Ba3

Moody's Investors Service said it assigned a Ba3 rating (LGD 5, 78%) to Rock-Tenn Co.'s proposed add-on senior unsecured guaranteed notes offering due 2016 and revised the outlook to positive from stable.

The agency affirmed Rock-Tenn's Ba2 corporate family rating, Ba1 ratings on the senior secured credit facilities, the Ba3 ratings on the 2011 and 2013 senior notes, Ba3 senior unsecured note rating and SGL-2 speculative grade liquidity rating.

Proceeds will be used to fund a portion of its $250 million 8.2% senior secured notes due 2011.

Rock Tenn's revised outlook reflects the company's improved credit protection metrics and operating margins despite the challenging operational environment, the expectation of continued strong financial performance and management's commitment to further debt reduction, the agency noted.

The Ba2 corporate family rating reflects the company's low cost vertically integrated asset base, its position as one of the largest producers of folding cartons and promotional point-of-purchase displays in North America, the company's strong financial performance and its good committed liquidity arrangements, Moody's said.

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