S&P: ACCO on positive watch, new loan BB+

Standard & Poor's said ACCO Brands Corp.'s ratings remain on CreditWatch with positive implications.

The ratings were initially placed on CreditWatch with positive implications in November following news of the company's merger with Mead C&OP through a Reverse Morris Trust transaction.

The agency also said it assigned BB+ ratings to ACCO's proposed $920 million senior secured credit facilities, which consist of a $250 million revolving credit facility due 2017, $300 million term loan A due 2017 and $370 million term loan B due 2019.

The recovery rating on these facilities is 1, indicating 90% to 100% expected recovery in a default.

The ratings are not on CreditWatch, but are dependent on a successful completion of the proposed transaction, the agency said.

Following the closing of the merger, S&P said it anticipates raising the corporate credit rating one notch to BB- and the issue rating on the company's 7 5/8% subordinated notes to B from B-.

The recovery rating will remain 6, indicating 0% to 10% expected recovery in a default.

The rating on ACCO's existing 10.725% senior secured notes due 2015 will be withdrawn after they are redeemed upon closing of the transaction.

The merger will increase ACCO's geographic reach and distribution, the agency said, while adding complementary products to its existing portfolio.

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