Fitch lowers Lexmark, notes to CCC+

Fitch Ratings said it downgraded Lexmark International II, LLC’s and Lexmark International Inc.’s long-term issuer default ratings to CCC+ and senior notes' issue rating to CCC+/RR4.

Fitch said the ratings reflect Lexmark's substantially worse than expected operating performance in 2017 and its resulting high and unsustainable leverage profile, diminished liquidity position, and refinancing risk.

“While Fitch expects Lexmark to be able to meet its operating liquidity needs and make its required loan amortization and note interest payments in 2018 subject to stabilized operating performance, the picture becomes significantly less clear starting in 2019,” the agency said in a news release.

“Fitch expects Lexmark will generate negative FCF in 2018, and as a result exit 2018 with around $100 million in cash, down from $200 million at Dec. 31, 2017.”

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