S&P rates Verso loan BB-

Standard & Poor's said it assigned its BB- issue-level rating to Verso Paper Holdings LLC's new $150 million asset-based revolving loan facility and $50 million revolving credit facility. The agency assigned a 1 recovery rating to the facilities, indicating an expectation for very high recovery of principal in the event of payment default.

According to S&P, the new credit facilities will replace the company's existing $200 million revolver, which matures on Aug.1, 2012.

S&P said the B corporate credit rating on Verso Paper reflects its view of the company's "highly leveraged" financial risk and "weak" business risk. The ratings incorporate the company's limited product diversity, substitution risks due to changing customer preferences for greater electronic content and vulnerability to fluctuations in input costs and selling prices, the agency said.

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