Fitch rates Interpublic convertibles BB-

Fitch Ratings said it assigned a BB- rating to Interpublic Group of Cos., Inc.'s $200 million 4.75% convertible senior unsecured notes due March 15, 2023. The agency's other ratings for the group are a BB- issuer default rating, BB- ratings for its ELF notes and senior unsecured notes and a B ratings for its cumulative convertible perpetual preferred stock.

The outlook is stable.

Interpublic agreed to exchange half of its old $400 million 4.5% convertible senior notes due 2023 for $200 million of the new 4.75% convertibles. The agency said this exchange enhances the group's financial flexibility by extending the first put date to March 15, 2013 from March 15, 2008. Also, the notes are not considered "participating" securities, meaning that should Interpublic pay a common dividend, it would not trigger the payment of contingent interest.

The ratings reflect Interpublic's position as one of the largest global advertising holding companies, diverse client base, ample liquidity and the progress it has made toward winning new accounts and driving organic growth, the agency said.

Concerns include the risks associated with Interpublic's turnaround as it is still addressing issues at Lowe and within its media operations, Fitch said, and the risk that a pending Securities and Exchange Commission investigation could result in a cash outflow.

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