Moody's cuts Rock-Tenn bonds to junk

Moody's Investors Service said it downgraded Rock-Tenn Co.'s senior unsecured bond ratings to Ba3 from Baa3 while simultaneously issuing a Ba2 senior implied rating. The outlook was restored to stable.

Moody's said the rating action follows Rock-Tenn's announcement of a pending $540 million acquisition of the pulp, paperboard and paperboard packaging assets of Gulf States Paper Corp. and concludes a review initiated on April 28.

The rating action accounts for significant leverage increases as a consequence of the acquisition, ongoing profit margin pressure and the influence of the acquisition debt, according to Moody's.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.