S&P: R.R. Donnelley notes BB

Standard & Poor's said it assigned a BB rating to R.R. Donnelley & Sons Co.'s proposed $350 million unsecured notes due 2021.

The notes have a recovery rating of 4, indicating 30% to 50% expected default recovery.

The proceeds will be used to partly fund tender offers for up to $400 million of the company's 8.6% notes due 2016, 6 1/8% notes due 2017 notes and 7¼% notes due 2018.

If there are any remaining proceeds, the company will repay borrowings outstanding under its revolving credit facility, S&P said.

The ratings are predicated on the company's positive cash flow generation, despite revenue declines, S&P said.

The ratings also reflect the assumption that leverage will decline as a result of debt repayment provided that economic, structural and pricing pressures do not worsen, the agency said.

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