Agency puts Abitibi under debt review

MONTREAL—Debt rating agency DBRS yesterday placed forestry company AbitibiBowater and its subsidiaries, along with TimberWest Forest Corp., under review with negative implications.
The ratings service said its action reflects the refinancing risk facing each company over the near term as a result of the ongoing global credit crisis and the impact of a major downturn in the U.S. and global economies.

“DBRS is concerned that substantial debt maturities and limited cash availability may adversely affect each company’s ability to successfully refinance debt maturities in the next 12 months,” it said in a report.
DBRS said it expects to assess the implications of the weak business environment and refinancing risks on each company in the next few weeks.
It’s not the first time of late that AbitibiBowater has faced downgrades. In April, ratings for the companies that make up AbitibiBowater was cut due to the relative strength of the loonie and deteriorate of North American newsprint.
The company successfully completed a series of financing transactions to address upcoming debt maturities and general liquidity needs.
Like many forestry companies, AbitibiBowater and TimberWest shares have taken a beating over the last year, losing 94 and 53 percent of their value, respectively.