Moody's puts Tembec on upgrade review

Moody's Investors Service said it placed the B2 corporate family rating, B2-PD probability of default rating and B2 senior secured note rating of Tembec Industries Inc. under review for an upgrade.

The review follows news that the company signed an agreement to be acquired by Ba3-rated Rayonier AM Products Inc., the world's largest specialty cellulose pulp manufacturer.

The review for upgrade was prompted by the possibility that Tembec's credit profile will improve once it is acquired by Rayonier, the agency said.

Moody's said the review will focus on the possible legal and implicit credit support to be provided by Rayonier.

The acquisition is expected to close before the end of the 2017 and is subject to shareholder approval and other customary closing conditions, the agency noted.

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