Appleton has initiated exchange offers and consent solicitations with respect to any or all of its senior notes due 2011 and subordinated notes due 2014; it expects to exchange these notes for new second-lien notes due 2015. We view the exchange offers as distressed exchanges and tantamount to a default. We are lowering the corporate credit rating to 'CC' from 'B', and lowering the issue-level rating on the senior notes and subordinated notes to 'C' from 'CCC+', pending the completion of the transactions. The negative outlook reflects our expectation that we will lower the corporate credit rating to 'SD', and the affected issue-level ratings to 'D' following the completion of the exchange offers. On Aug. 18, 2009, Standard&Poor's
