S&P downgrades Lexmark

S&P said it lowered its corporate credit rating on Lexmark International Inc. to B- from B.

The outlook is negative.

The agency also lowered its issue-level ratings on the company's senior notes and credit facility to B- from B. The recovery rating remains 3, indicating an expectation for meaningful recovery (50%-70%; rounded estimate: 65%) in the event of a default.

“The downgrade reflects weak operating results including significant negative free cash flow in 2017 and our expectation that performance will remain under pressure in 2018 as the company rebuilds installed base through multiple restructuring phases,” S&P said in a news release.

“While we expect gradual improvement in operating results from recent hardware refresh and subsequent profitable supply sales, we believe negative free cash flow and scheduled debt payments will continue to pressure Lexmark's already weakened liquidity position.”

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