&P Asgns Boise Cascade $600M Crd Fac BBB- Bank Ln Rtg.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 8/8/97-- Standard & Poor's Friday has assigned its triple-'B'-minus rating to Boise Cascade Boise Cascade Holdings, LLC, which uses the trade name Boise, is an American pulp and paper company, ranked as the thirteenth largest forest products company in the world. Corp.'s $600 million senior unsecured revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility maturing June 28, 2002. The bank loan rating is equal to the corporate credit rating of the company, reflecting its senior unsecured status. In addition, Standard & Poor's has affirmed its triple-'B'-minus corporate credit and senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. ratings and double-'B'-plus preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. rating on the company. The outlook is stable. The ratings reflect Boise Cascade's moderate financial profile and an improving, but still slightly below-average, business profile as the company strengthens its cost position and moves toward more value-added paper production. Boise has changed its product mix dramatically in the past few years, selling high-cost West Coast commodity operations and improving fiber self sufficiency in the Pacific Northwest. Last year's sale of its Rumford, Maine mill for $640 million allowed Boise to reduce debt and fully fund a new 330,00-ton uncoated paper machine which recently started up. In addition, the company continues to aggressively grow its office products operations. These actions are expected to lead to improved financial performance through the industry cycle with an increased proportion of sales in more stable, value-added paper and an expanding share of sales and earnings from its growing nonpaper (wood and office products) businesses. However, performance over time will still primarily follow the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. pricing pattern of the paper industry, although earnings and cash flow, based on the larger proportion of nonpaper sales, should be more stable than in the past. Funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. to debt should average about 25%-30% through the cycle, as the company uses the remaining Rumford mill sale proceeds to fund the new uncoated machine and other capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. projects. Debt to capital should average in the 50% area, as the company continues to aggressively grow the office products operation through primarily debt-financed, modest-sized acquisitions. OUTLOOK: Stable. Expected improvements in paper markets should allow operating performance to be at adequate levels and permit improving credit protection measures over a cycle, Standard & Poor's said. --CreditWire CONTACT: Edward Brennan, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , 212/208-1112 |
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