Smurfit-Stone Credit Rating Improves

Market conditions have been difficult in the paper and packaging industry, but Smurfit-Stone Container Corp., Chicago, has received some good news on the financial front.

In early November, the company’s corporate credit rating was raised by Standard & Poor’s (S&P) Ratings Services from B to B+.

S&P called the company’s outlook stable, and raised the senior secured ratings of Smurfit-Stone’s subsidiaries from BB- to BB and senior unsecured debt ratings from CCC+ to B’.

According to a Smurfit-Stone news release, “S&P said the upgrade reflects the combination of Smurfit-Stone’s continued solid operating performance and meaningful debt reduction as a result of improved containerboard market conditions.”

The company says it reduced its debt by $328 million in the third quarter of 2007, largely as a result of the sale of its Brewton, Ala., mill. Since year-end 2005, the company says it has reduced its debt nearly $1.2 billion.

“Our focused strategy is improving our financial results and we remain on track to deliver greater shareholder value over the long term,” says Patrick J. Moore, Smurfit-Stone chairman and CEO.

The Smurfit-Stone release claims that S&P as a rating agency sees “balanced supply and demand fundamentals [that] should continue to support favorable pricing” in the market. Regarding Smurfit-Stone, lower debt and interest expense have resulted in credit measures that are reaching levels more appropriate for a higher rating, according to S&P.

Smurfit-Stone Container Corp is one of the largest integrated manufacturers of paperboard and paper-based packaging products and services, and one of the world’s largest paper recyclers.