Moody's rates Tembec notes B3

Moody's Investors Service said it assigned Tembec Industries Inc.'s proposed senior secured note offering a B3 rating and a corporate family rating of B3 and a liquidity rating of SGL-2 to the company.

The outlook is stable.

The ratings reflect the company's significant exposure to the highly volatile market pulp and wood products industry segments, the company's exposure to the strength of the Canadian dollar and the volatility of input costs, Moody's said.

Factors supporting the rating include the company's good liquidity position and the diversification provided by material operations in several different sectors, the agency said.

Despite the product diversity, earnings and cash flow are expected to remain quite volatile given the inherent volatility of the sectors that Tembec operates in, Moody's said.

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