Moody's: Smurfit Kappa view positive

Moody's Investors Service said it changed the outlook to positive from stable on Smurfit Kappa Group's Ba3 corporate family rating.

The change in outlook was prompted by the company's strengthened financial profile, according to the agency.

The Ba3 rating reflects leading market positions in Europe and Latin America, the integrated containerboard and corrugated operations, an experienced management team as well as lower absolute and relative debt levels, Moody's said.

Pro forma debt-to-EBITDA leverage was 4.2 times at March 31, compared with 7.6 times at Dec. 31, 2006.

The rating also considers the cyclical nature of the industry and its highly competitive nature, potential for further rising raw material costs as well as imports from North American affecting supply and demand balances in Europe, the agency noted.

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