Moody's changes ACCO to stable

Moody's Investors Service said it changed ACCO Brands Corp.'s outlook to stable from negative and affirmed its corporate family rating at Ba3, probability of default rating at Ba3-PD, $500 million senior notes at B1 (LGD5, 77%, adjusted from 80%) and speculative grade liquidity rating at SGL-2.

The agency said the outlook change reflects its expectation that ACCO will continue to reduce its debt reduction despite its modest operating performance.

"The concerns we expressed last year about ACCO's operating performance weakness have continued, although the pace of contraction is moderating," Kevin Cassidy, senior credit officer at Moody's, said in an agency news release. "We are stabilizing the outlook despite the risk of further softness in the near term because the company is still generating enough free cash flow to aggressively pay down debt and reduce leverage, measured as debt/EBITDA, to around 4 times by the end of 2013."

Moody's said ACCO's Ba3 corporate family rating reflects the company's good size at around $2 billion, product diversification within office products and solid geographic diversification.

At the same time, the rating incorporates the cyclicality and the mature nature of the office and school supplies industry, the agency said.

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