S&P rates R.R. Donnelley notes BBB

Standard & Poor's said it assigned a BBB issue-level rating to R.R. Donnelley & Sons Co.'s proposed $350 million senior notes due 2016.

The outlook is negative.

Proceeds, along with cash on hand and drawings under the company's revolving credit facility if necessary, will be used to repurchase outstanding 5.625% notes due 2012 and 4.95% notes due 2010 under a tender offer. S&P expects the transaction will have no material impact to credit measures but will improve the company's maturity profile.

The BBB corporate credit rating reflects R.R. Donnelley's leading market position, scale of business operations, diversity across multiple segments of the highly fragmented printing industry and strong cash flow base, the agency said.

Somewhat offsetting these factors are the highly cyclical, competitive and fragmented nature of the printing industry and the agency's expectation for continued revenue declines over the near term, S&P said.

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