TEXT-S&P assigns Pitney Bowes notes 'BBB' rating
Nov 20 - Standard & Poor's Ratings Services said today it assigned its 'BBB' issue-level rating to Pitney Bowes Inc.'s proposed offer of $75 million notes due 2022. The company expects to use the proceeds for general corporate purposes including potentially to help repay debt maturing in 2013. Our corporate credit rating, outlook, and individual issue level ratings are unaffected by the transaction. The ratings on Pitney Bowes reflect our view of the company's business risk profile as "satisfactory" and its financial risk profile as "intermediate," and incorporate our expectation that operating trends will remain under pressure into 2013. The ratings reflect Pitney Bowes' relatively predictable and recurring cash flow supported by its significant market share in the U.S. postage meter market, where the company continues to maintain its share of a shrinking market (which has been exacerbated by the current weak economy). EBITDA of $805 million in September and 15% margins are lower than historical levels as new growth initiatives have yet to offset the declines in the mainline business. As of Sept. 30, 2012, leverage was about 2.7x, down from fiscal 2011's 3.1x, as recent debt maturities were repaid. However, we expect fully adjusted leverage to remain in the high-2x area in the near to intermediate term, reflecting our expectation of a lack of revenue and EBITDA growth. (For the latest corporate credit rating rationale, see Standard & Poor's research update on Pitney Bowes published on Nov. 13, 2012, on RatingsDirect). Temporary contact telephone numbers: Jacob L. Schlanger (917) 371-5651; Martha P. Toll-Reed (917) 685-3188 RATINGS LIST Pitney Bowes Inc. Corporate credit rating BBB/Stable/A-2 New Rating Pitney Bowes Inc. Senior unsecured $75 million notes due 2022 BBB 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.