Moody's affirms Intl Paper

Moody's Investors Service said it affirmed the Baa2/Prime-2 ratings and negative outlook of International Paper Co. on news of the company's decision to divest of its Canadian Weldwood division. The sale price is about $950 million in cash.

International Paper has not yet indicated how it will use the net proceeds, however, since the company has indicated that a strong balance sheet is a priority, Moody's anticipates that a significant proportion of the proceeds may be used to reduce debt.

However, while the transaction reflects an ongoing commitment to reconfiguring the business, Moody's does not expect the transaction to have a significant impact on near-term profit margins or debt protection measures, and accordingly, the ratings and outlook were affirmed at prevailing levels, the agency said.

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