Moody’s drops R.R. Donnelley, revolver, notes

Moody's Investors Service said it downgraded R.R. Donnelley & Sons Co.'s corporate family rating to B1 from Ba3 and probability of default rating to B1-PD from Ba3-PD as part of an action related to the company's pending spin transaction in which the company's new revolving term loan, an $800 million five-year senior secured credit facility, was rated Ba1.

As part of the same action, the agency downgraded R.R. Donnelley’s existing revolving credit facility to Ba1 from Baa3 (upon completion of the spin transaction, the Ba1 rating for the existing credit facility will be withdrawn), downgraded the senior unsecured notes rating to B2 from B1 and changed the outlook to stable from developing.

Moody's also upgraded the speculative grade liquidity rating to SGL-2 (good) from SGL-3 (adequate).

Moody's said the ratings anticipate the spin transaction closing, which requires satisfaction of customary pre-conditions (including financing) such as receiving final clearance from the SEC and the Canadian regulators.

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