Jul 13, 2007. /Lesprom Network/. Fitch Ratings has affirmed Plum Creek Timber Company's (PCL) ratings as follows: issuer default ratings 'BBB-', senior unsecured bond, 'BBB-', bank revolver and of 'BBB-'. In addition, Fitch also rates the company's new $350 million bank term loan 'BBB-'. The outlook is stable. PCL has not been immune to the chaos afflicting lumber and building materials caused by the retreat in homebuilding. However, earnings have been resilient and PCL should weather current misfortunes better than its downstream lumber and panel manufacturing customers. This past first-quarter's operating margin was still north of 20% and little changed from the fourth quarter of last year. The upside to PCL's timber business has been a strong pulpwood market, and PCL has been taking advantage. Manufacturing operations (lumber, plywood and fiberboard) have been running nominally EBITDA positive (better than most), and real estate operating margins have been firm although the acreage sold has been variable. The small decline in EBITDA that PCL will probably see this year is not a harbinger of the future, in Fitch's view. More significant is the borrowing that PCL is doing to indirectly finance its share repurchase program. Debt is growing at nearly twice the pace of PCL's enterprise value and if the current share repurchase authorization of $200 million is exhausted before the end of this year, net debt to EBITDA could approach 4.5 times (x). At the end of the first quarter net debt to EBITDA was 4x. Fueling PCL's share repurchases in part is the high price of timberland itself, which has made business reinvestment a difficult return proposition. Fitch's affirmation of PCL's ratings and outlook contemplate additional share repurchases up to the limits of the current authorization. Plum Creek is the largest and most geographically diverse private landowner in the nation, with more than 8 million acres in major timber producing regions of the United States. The company also produces lumber, plywood and medium density fiberboard (MDF) in 10 wood products manufacturing facilities in the Northwest. Plum Creek employs more than 2 100 people across 18 states.