Good market position in carbonless and thermal papers; Adequate near-term liquidity; and Manageable near-term debt maturities. Long-term demand decline in carbonless paper volumes; Weak cash flow relative to total indebtedness; High debt leverage; and Some degree of customer concentration. The 'B' rating on Appleton, Wis.-based Appleton Papers Inc. reflects the company's highly leveraged financial risk profile, as exhibited by its adjusted leverage in excess of 7x, which is somewhat mitigated by its manageable near-term debt maturities and our view of its liquidity as adequate. In addition, the rating reflects Standard&Poor's Ratings Services' assessment of the company's weak business risk profile, which incorporates Appleton's ongoing efforts to make up for some of the long-term demand decline in its carbonless
