Moody's rates new Cadmus notes B2

Moody's Investors Service assigned a B2 rating to Cadmus Communications Inc.'s proposed $125 million issuance of senior subordinated notes due 2014. Moody's also confirmed Cadmus's senior implied rating at Ba3 and its issuer rating at B1.

The outlook is stable.

Moody's said the ratings reflect Cadmus's high leverage, modest margins, competitive pressure and the challenges facing its magazine printing business. The ratings are supported, however, by the company's leading market position in the medium-run professional journal print market, the niche it has developed in content management and distribution services, its diversified customer base, its free cash flow generation and meaningful deleveraging over the past two years.

At the end of March, Cadmus recorded total debt-to-EBITDA of 3x, down from about 3.5x at the end of 2002.

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