Moody's lowers R.R. Donnelley

Moody's Investors Service said it downgraded R.R. Donnelley & Sons Co.'s (RRD) corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD, and senior unsecured notes rating to Caa1 from B3. The agency also confirmed the senior secured term loan B and senior secured notes at B1. Moody's withdrew the company's speculative grade liquidity rating and changed the outlook to stable from rating under review.

This action concludes the review for downgrade started on Nov. 4, following the company's agreement with to be acquired for an enterprise value of $2.1 billion by Atlas Holdings LLC, Moody’s said. On Dec.14, RRD entered into a new agreement with Chatham Asset Management, LLC to be acquired for an enterprise value of $2.3 billion. RRD terminated its pact with Atlas. Chatham's acquisition of RRD closed on Feb. 25.

"The downgrade reflects our expectation that RRD's leverage will remain elevated at around 6.5x in the 12-18 months following the transaction close," said Aziz Al Sammarai, a Moody's analyst, in a press release.

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