Moody’s downgrades Lexmark

Moody's Investors Service said it downgraded Lexmark International, Inc.'s corporate family rating to Ba3 from Ba2, probability of default rating to Ba3-PD from Ba2-PD and senior unsecured debt ratings to Ba3 from Ba2.

The outlook was changed to negative. The action concludes the review for downgrade that was initiated on April 20, 2016 and continued following a rating action on Nov. 29, 2016.

Moody’s said the actions were triggered by the company's weaker than expected financial performance since the close of the buyout by the Asian consortium and the expectation for further weakness in supplies revenues.

“As a result, Moody's expect that Lexmark's adjusted debt/EBITDA leverage will remain above 4 times over the next 18-24 months,” the agency said in a news release.

“The negative outlook reflects the possibility that the company's financial profile may further erode if the company is not successful in defending its market share or is unsuccessful in its product launches in new markets.

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