Moody's downgrades Merrill

Moody's Investors Service said it downgraded Merrill Corp.'s probability of default rating to Ca from Caa2, corporate family rating to Caa3 from Caa1, first-lien senior secured credit facilities to Caa1 from B2 and second-lien senior secured term loan to Ca from Caa3.

"Merrill has been able to make the necessary operational adjustments to restore about half of its recession-era decline in EBITDA and this has improved its credit metrics, but the combination of a thin free cash flow cushion, retrenchment in the capital markets over the past two months, and imminent debt maturities has raised the specter of a deemed default event," Moody's analyst Ben Nelson said in a news release.

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