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China Forestry Faces Bond Coupon Deadline Amid Audit Delays

China Forestry Faces Bond Coupon Deadline Amid Audit Delays | Timberland Investment | Scoop.it

China Forestry Holdings Co., a timber producer backed by private equity firm Carlyle Group LP, faces a payment deadline on its U.S. dollar bonds today as it seeks more time to audit its books and complete a debt buyback.


The company must pay the overdue half-yearly 10.25 percent coupon on $180 million of November 2015 securities to avoid a default, according to a May 16 Hong Kong stock exchange filing. A one-month grace period expires today. China Forestry paid the previous coupon in November after a similar delay.


“They’re effectively in default by our definition,” Johnson Ng, an analyst in Hong Kong at Standard & Poor’s, said by phone June 13. “The nature of their business requires a lot of capital for harvesting and trading. We think they’ll face difficulty in getting financing support, especially against the backdrop of accounting issues.”


The specter of default serves as a reminder that companies in emerging markets may not always employ the best corporate governance and accounting standards. Since discovering financial irregularities in early 2011, China Forestry has only been able to account for less than 1 percent of sales, it said in April 2012. Sino-Forest Corp., once China’s largest timber grower, defaulted on its dollar bonds before filing for bankruptcy in March last year after short-seller Muddy Waters LLC said it overstated its timber holdings.

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OfficeMax Says Lehman-Backed Timber Note Liabilities Are Gone

OfficeMax Says Lehman-Backed Timber Note Liabilities Are Gone | Timberland Investment | Scoop.it

OfficeMax Inc. on Friday said any liabilities related to timber notes backed by Lehman Brothers Holdings Inc. are officially extinguished, meaning the office-supply chain can book a gain of $671.1 million.

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The issue over the timberland notes was big enough for OfficeMax to post a six-page "frequently asked questions" document on the financial portion of its website, including ones about how Lehman's bankruptcy affected the company.


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Moody's changes Weyerhaeuser's Baa3 rating outlook to positive

Moody's changes Weyerhaeuser's Baa3 rating outlook to positive | Timberland Investment | Scoop.it

Moody's Investors Service changed Weyerhaeuser Company's (Weyerhaeuser) rating outlook to positive from stable and affirmed the company's Baa3 senior unsecured rating.


"The change in outlook to positive reflects the company's solid earnings momentum and our view that leverage will drop below 3x and remain there as the company's financial performance strengthens with stronger demand as US housing starts continue to improve towards normalized levels and off-shore timber demand remains strong" said Ed Sustar, Moody's Vice President.

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