S&P affirms Omnicom

Standard & Poor's said it affirmed Omnicom Group Inc.'s A- corporate credit rating and removed it from CreditWatch, where it was placed with negative implications on Feb. 12.

The outlook is negative, based on concern about near-term revenue and EBITDA pressure from the recession's effect on marketing and advertising budgets, as well as the high likelihood that Omnicom's two remaining convertible debt issues, totaling nearly $1.2 billion, will be put to the company in August 2009 and June 2010. This follows the put of virtually all of its $847 million convertible bonds in February.

The A- rating reflects Omnicom's strong position among the top global advertising agency holding companies, good geographic and business diversity, flexible cost structure, and good discretionary cash flow, according to the agency.

A financial structure that consists of a large proportion of out-of-the-money putable convertible debt obligations and a history of relatively aggressive share repurchase and acquisition activity are concerns, the agency said.

Omnicom's adjusted debt-to-EBITDA ratio was 2.6x at year-end 2008, down modestly from 2.9x in 2007.

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