Standard & Poor`s Rating Services has revised its long-term credit rating on Norske Skog to B, from earlier B+. The Negative Outlook is maintained. Norske Skog does not have interest or covenants linked to the rating level on the existing debt.
Standard & Poor made the following 4 points:
“European annual newsprint contract prices for 2010 are falling more than we previously expected, due to overcapacity and weak demand.
In our opinion, this is likely to cause a decline in Norway-based forest product group Norske Skogindustrier ASA's operating and financial performance to levels which are not commensurate with a 'B+' long-term rating.
We are lowering the long-term ratings on Norske Skog to 'B' from 'B+'.
The negative outlook primarily reflects the risk that Norske Skog's financial performance will weaken beyond our base case expectations, and/or remain depressed for a lengthy period.”
