Fitch Rates Weyerhaeuser's $500MM New Issue 'BB+'; Outlook Negative
CHICAGO-(Business Wire)-September 29, 2009 - Fitch Ratings has assigned a 'BB+' rating to Weyerhaeuser Company's (Weyerhaeuser) 7.375% senior unsecured notes ($500 million) due 2019. The Rating Outlook for all ratings is Negative.
The rating is based on Weyerhaeuser's poor credit metrics and negative free cash flow stemming from the recessionary collapse of residential construction, which has worked its way back into Weyerhaeuser's integrated business lines of home building, lumber and wood panel manufacturing and the growing and harvesting of trees. The proceeds from this offering will help replenish cash resources, which Fitch now estimates could fall as much as $780 million this year after announced property sales, dividend cuts and debt repayments of almost $350 million in the third quarter. Free cash flow is projected to be negative in 2010 as well based on Fitch's expectations of a slow recovery for the industry with continued downward pressure on the prices for lumber, engineered wood products and wood panels.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site. The issuer did not participate in the rating process other than through the medium of its public disclosure.
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.
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