Outlook fades for paper firm LBOs
Standard & Poor’s revised its rating outlook to negative from stable on two European leveraged buy-outs on Tuesday. The paper and packaging firms Lecta and Smurfit Kappa will struggle to maintain their current ratings, the agency warned.
Irish cardboard packaging firm Smurfit Kappa’s BB rating has been affirmed but the outlook revised to negative. S&P said that it faces “significant challenges to improve operating performance”.
Kappa’s leverage ratio was about 4.3 times Ebitda at the end of 2008, up from 3.9 times in 2007. S&P thinks
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