S&P rates R.R. Donnelley notes BB

Standard & Poor's said it assigned R.R. Donnelley & Sons Co.'s proposed $350 million unsecured notes due 2022 an issue-level rating of BB (at the same level as the BB corporate credit rating on R.R. Donnelley), with a recovery rating of 4, indicating an expectation for average (30% to 50%) recovery in the event of a payment default.

The company will use the proceeds from the new notes to tender for up to $350 million principal amount of several debt securities, including the company's 5½% notes due 2015, its 6 1/8% notes due 2017 and its 7¼% notes due 2018.

S&P said its ratings on R.R. Donnelley are predicated on the company's positive cash flow generation (despite revenue declines) and the assumption that leverage will decline as a result of debt repayment, provided that economic, structural, and pricing pressures do not worsen.

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