Fitch rates ACCO notes BB, loans BB+

Fitch Ratings said it assigned a BB/RR4 rating to ACCO Brands Corp.’s $400 million of eight-year senior unsecured notes.

The notes, in combination with internally generated cash and incremental revolver borrowings, will be used to pay down the company's $500 million of senior unsecured notes due 2020.

The proposed refinancing has a modestly positive impact on ACCO's credit profile, due to an improved maturity ladder and potentially lower interest expense due to the low rate environment, the agency said.

In addition, Fitch assigned BB+/RR1 ratings to ACCO's new €300 million term loan A and A$80 million term loan A. The €300 million term loan A will be used to finance ACCO's proposed $333 million acquisition of Esselte Group Holdings AB, while the A$80 million term loan A will be used to refinance ACCO's existing Australian dollar-denominated term loan A.

The drawdown on both term loan sis contingent upon the successful closing of the Esselte acquisition, which was announced on Oct. 20.

The outlook is stable.

Fitch said the ratings are predicated on the company's stable free cash flow (FCF) and ongoing debt paydown, but constrained by concerns regarding secular challenges and channel shifts within the company's merchandise mix, as well as the risk of further debt-financed acquisitions.

© 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.