Credit rating company Standard & Poor's has taken newsprint maker Norske Skog off its CreditWatch Negative list. The long-term corporate rating is affirmed on B- with a negative outlook.
The agency says the Norway-headquartered forest product group is likely to be able to repay its near-term debt maturities with existing liquidity resources and near-term operating cash flows.
“We are revising our view of the group's liquidity profile from weak to less than adequate,” says.
It is also removing all ratings, including the 'B-' long-term and 'B' and short-term ratings, from CreditWatch, where they were placed with negative implications on September 20, and affirming them.
“The negative outlook primarily reflects Norske Skog's less than adequate liquidity position,” it says in a statement.
Standard & Poor's says Norske Skog's liquidity position “remains under pressure due to tight covenant headroom, downside operating risk, and the risk that the group will have only a modest cash position on its balance sheet after honouring its debt maturities in the first quarter of 2012. These risks are reflected, in our view, in the current rating level and in the outlook.”
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