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
Temporary contact telephone numbers: Jacob L. Schlanger (917) 371-5651; Martha
P. Toll-Reed (917) 685-3188
Pitney Bowes Inc.
Corporate credit rating BBB/Stable/A-2
Pitney Bowes Inc.
$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