Apr 16, 2007. /Lesprom Network/. Standard & Poor's Ratings Services said on April 13 that it revised its outlook on newsprint producer White Birch Paper Co. to stable from positive. At the same time, we affirmed our 'B' corporate credit rating and 'B+' bank loan and '1' recovery ratings on White Birch's senior secured first-lien revolving credit facility. In addition, we assigned bank loan and recovery ratings to White Birch's planned $550 million first-lien Term Loan B facility based on preliminary terms and conditions. The term loan is rated 'B', same level as the corporate credit rating, with a '2' recovery rating indicating an expectation of meaningful (50%-80%) recovery of principal in the event of a payment default. Proceeds from the new loan will be used to repay existing first- and second-lien term loans. We will withdraw our ratings on the existing term loans upon completion of the proposed transaction. "The outlook revision on White Birch reflects our expectations that declining newsprint prices, combined with an increase in debt following the proposed refinancing, will prevent the previously expected improvement in credit measures that might have led to a higher rating," said Standard & Poor's credit analyst Andy Sookram. Debt pro forma for the transaction will increase by $26 million from year-end 2006, to $632 million, with pro forma debt to 2006 EBITDA of 4.2x. "Despite weaker newsprint market condition, we expect White Birch to generate credit metrics in line with expectation because of its favorable cost position," Mr. Sookram said. "We are unlikely to revise the outlook to positive unless the company meaningfully reduces debt, which would result in stronger credit measures over the cycle. On the other hand, we could revise the outlook to negative if earnings and cash flow begin to deteriorate substantially more than currently expected because of lower newsprint prices or higher input costs." Today White Birch Paper operates four pulp and paper mills; three in Canada and one in the United States of America. Together, these mills produce more than 1.3 million tonnes of newsprint and directory paper with up to 50% recycled content. Headquartered in Greenwich, Connecticut, White Birch Paper is a privately owned, family-run business that manufactures and ships paper products to customers in North America and all over the world.