Fitch: Potlatch spinoff could be positive

Fitch Ratings said the potential spinoff of Potlatch Corp.'s manufacturing businesses may have positive rating implications for the company. The businesses that would be spun off, pulp and paperboard and paper tissue/towels, have been enjoying better earnings recently from good demand and higher prices. However, these businesses have not always run synchronized and have not been consistently profitable, the agency said, and with their spinoff would go required maintenance and growth capital that are needed to increase critical mass and which otherwise would use resources that Potlatch intends to employ in its timberland operations.

Potlatch has a BB+ issuer default rating and positive outlook, and its senior unsecured notes and bank credit facility are rated BB+ by Fitch.

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