@Mark – did you try to build your string of text with a newline character or a paragraph sign?
myDocument.watermarkPreferences.watermarkText = "Confidential"+"\r"+"Not for redistribution";
I used the + sign to concatenate three strings (not necessary, I did it for readability).
The middle one holds the paragraph sign (an escaped "r").
For a newline you could use "\n", but it should make no difference in this case…
Uwe