Moody's lowers Lexmark

Moody's Investors Service said it lowered Lexmark International, Inc.'s $150 million senior unsecured notes due May 2008 and senior unsecured $300 million bank revolving credit facility due 2010 to Baa1 from A3.

This concludes the review begun on July 17, and the outlook is stable.

The agency said the downgrade reflects prospects for significantly weaker-than-expected operating results in the second and third fiscal quarters and the likelihood that ongoing pricing pressure in the company's laser and inkjet product offerings, a less robust installed base of inkjet units, a developing change by customers in using less profitable moderate-use inkjet cartridges and the need to increase product development and marketing spending will all contribute to weaker than historical results for Lexmark.

Lexmark's liquidity profile remains strong, Moody's noted. In June, cash and equivalents were $527 million and the company maintains access to its unused $300 million revolver.

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