Moody's rates Cascades revolver Ba3

Moody's Investors Service said it assigned a Ba3 (LGD5, 72%) rating to Cascades Inc.'s new C$100 million senior unsecured revolving credit facility and affirmed the company's corporate family and probability-of-default ratings at Ba2 and its $675 million senior unsecured notes due 2013 and $250 million 6¾% senior unsecured notes due 2013 at Ba3 (LGD5, 72%).

The outlook is stable.

The agency said Cascades' Ba2 corporate family rating reflects the diversity derived from its boxboard, packaging and tissue businesses, its significant position in the Canadian containerboard segment and its relatively stable earnings and cash flow.

The rating also considers Cascades' debt protection measures, which are weak for the rating; its exposure to the strong Canadian dollar, to cyclical pricing and to volatile raw material costs; and the company's penchant for conducting relatively small, debt-financed acquisitions, Moody's said.

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