Moody's rates RR. Donnelley loan Baa3

Moody's Investors Service said it revised the outlook for R.R. Donnelley & Sons Co. to negative from stable as long-term secular pressures cause industry fundamentals to remain at recessionary lows.

With the stagnant fundamentals indicating that average peak-through-trough operational risks have increased, management's preparedness to take compensatory actions to maintain overall business risk at the Baa3 level by reducing financial risks via reduced debt and financial leverage is uncertain, the agency added.

R.R. Donnelley's Baa3 senior ratings and Prime-3 commercial paper ratings were affirmed. Moody's assigned a Baa3 rating to the company's senior bank credit facility.

The ratings consider a solid operating platform with good product diversity and aggregate scale, a reasonable cost position, positive cash flow good access to the capital markets and a generally good liquidity position, the agency said.

The ratings also consider increasing operational risks, the agency said.

The negative outlook considers tepid top-line growth, minimal margin expansion and shareholder return pressures, the agency added.

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