Fitch Assigns Nordic Paper Final B+ IDR With Positive Outlook On Margin, Fcf And Leverage Upside

Fitch Ratings has assigned Nordic Paper Holding AB a final long-term Issuer Default Rating of B+ with a Positive Outlook, alongside a senior secured rating of BB- on its term loan B with an RR3 recovery rating. The rating balances Nordic Paper’s relatively small scale, concentration in greaseproof and kraft papers, negative free cash flow through 2026 and elevated capex execution risk at the Backhammar mill against its resilient profitability, strong niche positioning and high exposure to non‑cyclical food packaging end markets. Fitch expects EBITDA margins to trend toward 20% from 2027, supported by the completion of the Backhammar investment programme, pricing improvements, operational efficiencies and procurement savings in logistics and chemicals. Gross leverage is projected to peak around 3.7x in 2025 before gradually improving to about 2.7x by 2028, with FCF margins moving to mid‑to‑high single digits as capex normalises. The Positive Outlook reflects potential for an upgrade if leverage stays below 4x, FCF margins remain above 4% and interest cover exceeds 3.5x on a sustained basis.