Fitch rates Pitney Bowes notes BBB-, view negative

Fitch Ratings said it affirmed the issuer default rating of Pitney Bowes Inc. and its subsidiary Pitney Bowes International Holdings, Inc. at BBB- and revised the outlook to negative from stable.

The agency also assigned a BBB- rating to Pitney Bowes' $600 million of 3.375% senior unsecured notes due 2021.

Net offering proceeds are to be used to repay $300 million of existing 6.125% preferred stock callable in October 2016 and for general corporate purposes including potential debt repayment.

The negative outlook reflects Pitney Bowes' gross leverage exceeding the agency’s negative rating threshold of 4 times. Fitch said it would likely stabilize the outlook if the company reduces leverage below 4 times either through debt repayment or EBITDA growth.

Although the agency views actions taken by the company including divesting underperforming assets and consequent debt reduction as positive, continued headwinds in mailing and software contribute to the negative outlook.

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