Moody's cuts Fraser Papers view to negative

Moody's Investors Service said it changed the outlook on Fraser Papers Inc.'s B3 senior unsecured rating to negative from stable and affirmed the B3 rating on the $150 million senior unsecured debt, the B2 corporate family rating and the SGL-3 speculative grade liquidity rating.

The negative outlook reflects the company's ongoing incurrence of operating losses and negative free cash flow and the uncertainty as to when these may improve given the difficult market conditions that the company continues to face, the agency said.

Moody's said the ratings reflect Fraser Papers' weak earnings performance over the past few years, its historically weak cash flow, its disparate collection of assets in a number of pulp and paper and lumber segments, the susceptibility of the company to cyclicality in the forest products industry, the impact of changes in the U.S./Canadian dollar exchange rate and exposure to high raw material costs.

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