CHH gets better credit report than parent

By Nicholas Bryant

Friday 28th April 2000

A week out from its annual result forestry giant Carter Holt Harvey has received a positive message from Standard & Poor's rating agency.

In recognition of the company's efforts to reconfigure its core businesses to best reflect changing market conditions the agency has affirmed Carter Holt's rating BBB-/A-3.

Standard & Poor's said the affirmation reflected its moderate cost position, high degree of vertical integration and satisfactory position in several Australasian forest product markets.

S&P sees CHH more positively than its majority shareholder, International Paper.

International Paper has had its BBB+ long-term corporate rating placed on CreditWatch with negative implications following its announcement it will bid for Champion International Corporation.

At the same time International Paper's short-term credit rating was affirmed at A-2.

Standard & Poor's said CHH's importance to International Paper gave the majority shareholder strong incentive to support the company and allow CHH access to its industry and management expertise.

It also outlined what areas would need to succeed before CHH's operating performance and returns reached "satisfactory" levels.

Facing acute competitiveness pressures in the Australasian fibre packaging market, CHH would be relying on the timely boost of its upgraded Kinleith pulp and paper mill and on its Project Genesis performance improvement initiatives, it said.

Carter Holt Harvey shares were trading at $1.74, up 2c, following the announcement.

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