S&P cuts Sappi outlook to negative

Standard & Poor's said it revised its outlook on Sappi Ltd. to negative from stable, reflecting an increased risk of continued weak financial performance in terms of its rating requirements amid challenging paper market conditions.

At the same time, the BB long-term corporate credit rating and the B short-term corporate credit rating were affirmed, the agency said, noting that the BB issue ratings on debt issued by Sappi Papier Holding GmbH (SPH) and guaranteed by Sappi were also affirmed, while the recovery rating of 4 on this debt remains unchanged.

S&P noted that the rating action reflects the company's exposure to the currently weak European fine paper market and the heightened risk of a downside scenario in which performance will not improve over the near term to the level expected for the current rating.

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