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Moody's rates American Reprographics notes B1
Moody's Investors Service said it downgraded American Reprographics Co., LLC's corporate family rating to B1 from Ba3 and assigned a B1 (LGD4, 55%) rating to the company's proposed $220 million senior notes due 2018.
The outlook is stable.
Proceeds from the proposed notes will primarily be used to repay existing bank debt and unwind an interest rate swap.
The ratings reflect continued pressure on the company's operating performance, weakness in the commercial construction market, deterioration in credit metrics, exposure to the residential and commercial construction end-markets that are both in a downturn, generally cyclical nature, significant regional concentration in California and acquisition risk as it seeks to expand its geographic presence, the agency said.
The ratings are supported expectations for continued positive free cash flow generation, the company's moderate pro forma leverage of about 4.0 times, its consistent free cash flow generation, its leading position as a provider of document management services, its significant scale relative to its competitors and the diversity of its customer base, Moody's said.
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