Moody's changes R.R. Donnelley outlook to developing

Moody's Investors Service said it changed R.R. Donnelley & Sons Co.’s outlook to developing from stable and affirmed the company's corporate family rating at Ba2, probability of default rating at Ba2-PD, speculative grade liquidity rating at SGL-2, senior secured credit facility at Baa2 (LGD1) and senior bonds at Ba3 (LGD4).

The outlook change was prompted by the company's announcement of its intention to create two new, independent, publicly traded stocks via a tax-free distribution to the company's shareholders by the end of 2016. Owing to a lack of certainty that a transaction will occur and the lack of detail related to the company's resulting risk profile, Moody's changed the outlook to developing.

The company's Ba2 corporate family rating is primarily driven by its size and leadership position in North American commercial printing and the agency’s expectation that leverage will be reduced below 3 times in 2016 after recent acquisitions are absorbed.

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