Moody's drops West Fraser to junk

Moody's Investors Service said it downgraded West Fraser Timber Co. Ltd.'s senior unsecured debt ratings to Ba1 from Baa3, concluding a review that began on May 14.

The company assigned a Ba1 corporate family rating and an SGL-3 speculative grade liquidity rating.

The outlook is negative.

Moody's said the downgrade reflects the company's weak operating and financial performance and the expectation that challenging industry conditions will limit ability to restore credit protection metrics to investment grade levels.

West Fraser's Ba1 corporate family rating reflects the company's vertically integrated cost competitive operations and the company's dominant market position as North America's largest lumber producer, the agency said.

The rating also reflects management's solid track record on maximizing asset productivity, modest product diversification and sufficient liquidity, the agency noted.

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