S&P rates American Reprographics facility

Standard & Poor's said it assigned its BB- rating to American Reprographics Co. LLC's planned $130 million first lien senior secured credit facility and a B rating to the company's planned $225 million second lien senior secured credit facility.

Proceeds from the proposed bank facilities will be used to refinance existing bank debt, repay mezzanine financing that exists at the holding company and operating company levels, and for fees and expenses.

The outlook is stable.

S&P said the ratings reflect the company's dependence on a single print industry segment (reprographics), high debt levels, and exposure to the cyclical commercial construction industry. These factors are somewhat offset by the company's leading position in the architectural, engineering, and construction reprographics segment, diversified customer base, stable operating margins, adequate liquidity, good free cash flow, and the expectation that the company's historically aggressive acquisition strategy will moderate substantially.

Pro forma for the proposed note issue, the company will rely primarily on internally generated cash flow and availability under its expected $30 million revolving credit facility due December 2008 for liquidity. At closing, the company is expected to have $25.2 million availability under its revolving credit facility.

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