Moody's: ACCO facility Ba2

Moody's Investors Service said it kept the existing credit ratings of ACCO Brands Corp. on review, but expects to upgrade the corporate family rating and probability of default rating to Ba3 from B2 if the acquisition of the office product segment of MeadWestvaco closes under its current terms.

At the same time, Moody's assigned a Ba2 rating to ACCO's $920 million senior secured credit facility which reflects an expected post-acquisition Ba3 corporate family rating and probability of default rating.

The rating on the senior subordinated notes remains under review, but is expected to be upgraded to B2 upon the closing of the acquisition. The senior secured notes are expected to be repaid in full at closing and Moody's said it expects to withdraw the rating at that time. The speculative grade liquidity rating was affirmed at SGL-2.

"The contemplated two notch upgrade of the corporate family rating to Ba3 reflects a material improvement in credit metrics pro forma for the transaction, a significant increase in the scale of the combined company and increased exposure to faster growing emerging markets in Latin America," Kevin Cassidy, senior credit officer at Moody's, said in a press release. "In addition, the acquisition will broaden ACCO's distribution to more mass retailers and away from the traditional Office Super Stores," he said.

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