S&P rates Omnicom notes A-

Standard & Poor's said it assigned an A- rating to Omnicom Group Inc.'s proposed senior unsecured notes to be issued in an amount of at least $750 million and affirmed the company's A- long-term corporate credit rating. The outlook is stable.

Proceeds are expected to be used for general corporate purposes, including share repurchases.

S&P said the rating on Omnicom reflects its strong position among the top three worldwide advertising agency holding companies, good geographic and business diversity and sustained discretionary cash flow, notwithstanding economic volatility.

These factors are partially offset by the risks associated with refinancing the company's potentially short-term debt maturities, the agency said. Issuance of low-coupon convertible debt has helped Omnicom to maintain strong interest coverage but has been accompanied by put features on convertible debt issues; these debt issues are sizable relative to EBITDA.

Lease-adjusted four quarters' average debt, plus acquisition-related earn-out payments and potential puts, to EBITDA was about 2.9x at Dec. 31, an improvement compared with a high point of 3.4x in 2002.

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