BD White Birch Investment LLC is the third-largest manufacturer of newsprint in North America, a business we view to be in a long-term secular decline. We are assigning our 'B+' corporate credit rating to White Birch and our 'B+' issue-level rating and '3' recovery rating to its proposed $185 million term loan (borrowers are subsidiaries Bear Island Paper WB LLC and White Birch Paper Canada Co. NSULC), indicating our expectations of meaningful recovery (50%-70%) of principal in the event of default. The company's $75 million asset-backed revolving credit facility and proposed $30 million paid-in-kind note are unrated. Our stable outlook reflects our view that volumes will remain fairly stable as increasing shipments of specialty papers offset declines in newsprint sales.
