The rating on Appleton, Wis.-based Appleton Papers Inc. incorporates our expectation that market conditions will gradually improve during 2010 due to a recovery in the U.S. economy. It also reflects weak demand because of challenging economic conditions, declining carbonless paper volumes, and high debt leverage. Good market positions and diverse end uses of its products partly offset these factors. We expect cash flow generation to increase, and that the company will use excess cash flow to reduce outstanding debt balances. Specifically, we expect adjusted debt to decline to less than $650 million at year-end 2010. Under this scenario, total adjusted debt to EBITDA would be around 5x and EBITDA coverage of interest expense around 2.5x, levels that we consider to
