Moody's: ACCO outlook negative

Moody's Investors Service said it changed ACCO Brands Corp.'s outlook to negative and confirmed its corporate family and probability-of-default ratings at B1, senior secured credit facilities at Ba2 (LGD2, 26%) and senior subordinated notes at B3 (LGD5, 86%) and upgraded the speculative-grade liquidity rating to SGL-3 from SGL-4.

This concludes the review for possible downgrade begun on Dec. 4.

The agency said the review was concluded without a downgrade and the speculative-grade liquidity rating was upgraded because of the increase in financial flexibility achieved by the company's most recent credit agreement amendment. The negative outlook, however, reflects Moody's concern that should the recession persist through 2009, ACCO's flexibility could once again diminish.

ACCO's B1 rating reflects its leverage, the negative secular trend regarding office employment, competition from private labels, increases in operating costs, increasing customer consolidation, the company's ability to effectively pass along price increases and the potential for slower realization of cost savings from restructuring initiatives, Moody's said.

Mitigating these factors is ACCO's solid market position within various product categories, a relatively diverse customer base and the longer-term potential cash flow and benefits associated with the company's restructuring program, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.