Moody's rates Omnicom notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to Omnicom Group Inc.'s proposed $750 million senior unsecured notes and affirmed Omnicom's Baa1 senior unsecured debt and Prime-2 commercial paper ratings. The outlook is stable.

Note proceeds will be used for general corporate purposes, including potential refinancing of other debt.

Moody's said the ratings reflect Omnicom's position as the largest global advertising marketing services agency, its broad geographic diversification, sizable annual free cash flow, high client retention and a large and diverse customer base.

Economically sensitive revenues, the need to continually adapt service offerings to changing advertising mediums and consumer buying habits, margin pressure from rising salary and service costs, a capital structure consisting largely of convertible bonds with put rights and event risks are areas of credit concern, the agency said. Debt to EBITDA was 3.1x at Dec. 31.

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