Norbord Inc.: Rating Report

On May 23, 2018, DBRS Limited (DBRS) changed the trend on the Issuer Rating and the Senior Secured Notes rating of Norbord Inc. (Norbord or the Company) to Positive from Stable and confirmed the Company’s Issuer Rating at BB. The recovery rating remains unchanged at RR3, and therefore, DBRS also confirmed Norbord’s Senior Secured Notes rating at BB. The trend change reflects DBRS’s expectation that Norbord’s very strong financial profile, resulting from an extremely strong operating performance achieved in 2017 and Q1 2018, is likely to persist in the near term as a result of the favourable oriented strand board (OSB) market outlook in North America and Europe as well as the continued progress made by Norbord toward growing its Specialty product lines, which are not directly correlated with commodity OSB and OSB-linked product markets and pricing. The ratings remain supported by Norbord’s leadership position in its key North American and Western European markets, its low-cost operations and its broad operating footprint in its key markets. Despite some progress made toward diversifying its operations, the Company remains substantially exposed to the volatile wood panel end markets, especially for commodity OSB and OSB-linked product lines.