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Industry Report Card: Canadian Basic Materials Ratings Diverge Amid Weak Demand Sep 08 Product Image

Industry Report Card: Canadian Basic Materials Ratings Diverge Amid Weak Demand Sep 08

  • ID: 1784180
  • September 2008
  • Region: Canada
  • Standard & Poors

FEATURED COMPANIES

  • Ainsworth Lumber Co. Ltd.
  • Barzel Industries Inc.
  • Cascades Inc.
  • Domtar Corp.
  • Fibrek Inc.
  • Norbord Inc.
  • MORE

Abstract
The credit outlook for Canada's basic materials companies is widely mixed, with forest products and building materials issuers facing considerable strain from weak demand, high input costs, and a persistently strong Canadian dollar. Metals producers, on the other hand, continue to benefit from strong prices amid steadily growing demand in Brazil, Russia, India, and China (the BRIC countries), and generally tight inventories. The ratings on Canadian forest products companies, all of which are speculative-grade except West Fraser Timber Co. Ltd. (BBB-/Negative/--), have been trending downward for several years. This trend culminated with the 2008 defaults of Ainsworth Lumber Co. Ltd. (SD/--/--), and Tembec Inc. (not rated), both of which recapitalized by converting unsecured debt into equity. The outlook for most...

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

- Holcim (Canada) Inc.
- Teck Resources Ltd.
- Norbord Inc.
- Barrick Gold Corp.
- Russel Metals Inc.
- West Fraser Timber Co. Ltd.
- Essar Steel Algoma Inc.
- Ainsworth Lumber Co. Ltd.
- Cascades Inc.
- Millar Western Forest Products Ltd.
- Cameco Corp.
- Grant Forest Products Inc.
- Catalyst Paper Corp.
- Novelis Inc.
- Masonite International Inc.
- Votorantim Cement North America Inc.
- Fibrek Inc.
- Thompson Creek Metals Co. Inc.
- Domtar Corp.
- Barzel Industries Inc.
- Resolute Forest Products Inc.

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