Moody's confirms ACCO ratings

Moody's Investors Service said it confirmed ACCO Brands Corp.'s Ba3 corporate family rating and other ratings but assigned a negative outlook.

Although ACCO's operating performance and credit metrics are weaker than anticipated when Moody's assigned the Ba3 corporate family rating, the confirmation recognizes that the company has reduced debt more than originally expected and that it may succeed in improving its credit metrics to an acceptable level in a reasonable period of time, the agency noted.

Nonetheless, the outlook is negative reflecting the risk that the company's near-term operating performance could be pressured by rising input and distribution costs, and greater-than-anticipated integration spending.

Moody's said the outlook could be revised to stable if ACCO successfully executes its restructuring plan and addresses cost pressures such that it improves profitability levels, reduces debt-to-EBITDA closer to 4.0 times and improves its free cash flow to debt metric to around 5%, while maintaining good levels of liquidity.

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