Fitch Ratings Affirms Potlatch Corp.'s Ratings.Business Editors CHICAGO--(BUSINESS WIRE)--Nov. 12, 2002 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed Potlatch potlatch (pŏt`lăch'), ceremonial feast of the natives of the NW coast of North America, entailing the public distribution of property. Corporation's (Potlatch) debt ratings of senior secured at 'BBB', senior unsecured at 'BBB-', senior subordinated at 'BB+', and commercial paper at 'F3'. The Rating Outlook for Potlatch is Stable. The 'BBB-' rating is assigned to the outstanding revenue bonds of Nez Perce Idaho, Hubbard County Minnesota and the City of Warren Arkansas being remarketed on behalf of Potlatch. Within the last nine months, Potlatch repaid $494 million in total debt using a portion of its proceeds from the sale of its pulp mill A pulp mill is a manufacturing facility that converts wood chips or other plant fiber source into a thick fiber board which can be shipped to a paper mill for further processing. in Cloquet, MN to Sappi. The sale of the Cloquet mill allowed Potlatch to exit the coated paper business, which lost the company ($18 million) in 2001. Potlatch's remaining tissue and bleached board businesses are improving, which should be evident in fourth quarter results. Plywood and oriented strand board Oriented strand board, or OSB, or waferboard, or Sterling board (UK), is an engineered wood product formed by layering strands (flakes) of wood in specific orientations. markets are still problems; however, with a low level of 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. , Potlatch should generate free cash flow, and net debt should continue to fall. Profitability for the moment could be elusive. Fitch anticipates improved credit statistics in 2003 with EBITDA/interest near 5.0 times (x). |
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