TEXT-S&P rates Dun & Bradstreet shelf preliminary 'A-'
June 26 - Standard & Poor's Ratings Services today assigned its preliminary 'A-' rating to The Dun & Bradstreet Corp.'s (D&B) unlimited new shelf filing of senior debt securities. D&B plans to use net proceeds from the sale of the senior debt securities for general corporate purposes, which we expect will include refinancing its $400 million senior notes due April 2013. The company had $842.8 million of debt outstanding as of March 31, 2012. The long-term corporate credit rating on D&B is 'A-'; it is on CreditWatch, where it was placed with negative implications on May 23, 2012, reflecting lower revenue expectations in 2012 and potential violations of the Foreign Corrupt Practice Act (FCPA) and local consumer data privacy laws in connection with data collection practices in China. The short-term commercial paper rating remains 'A-2', and was not placed on CreditWatch. The CreditWatch action reflects D&B's continued aggressive share repurchase plans, despite weaker operating performance expectations, high debt balances, and the possibility of penalties related to potential legal infractions in China. We therefore expect D&B's leverage to remain above our 2.5x target for the rating over at least the next several quarters. D&B did not repurchase any shares during the first quarter, but we expect it will spend between $150 million and $175 million this year, or approximately 90% to 100% of discretionary cash flow, based on our estimates. RELATED CRITERIA AND RESEARCH -- Methodology: Short-Term/Long-Term Ratings Linkage Criteria For Corporate And Sovereign Issuers, May 15, 2012 -- Methodology And Assumptions: Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011 -- Use Of CreditWatch And Outlooks, Sept. 14, 2009 -- Business Risk/Financial Risk Matrix Expanded, May 27, 2009 -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008 RATINGS LIST The Dun & Bradstreet Corp. Corporate credit rating A-/Watch Neg/A-2 Rating Assigned Unlimited senior shelf debt A-(prelim) Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
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