Moody's ups Moore Wallace

Moody's Investors Service said it has downgraded R.R. Donnelley & Sons' senior unsecured debt ratings to Baa2 from A2 and its short-term debt ratings to Prime-2 from Prime-1. At the same time, Moody's upgraded Moore Wallace North America Finance Inc.'s senior unsecured debt ratings to Baa1 from B1. Moody's also confirmed Moore Wallace Holdings USA Inc.'s Ba2 senior secured bank credit facility rating pending the refinancing of this debt and has confirmed the company's Ba3 senior implied and B1 issuer ratings until the closing of the merger, at which time these three ratings will be withdrawn.

The proposed $850 million to $1.0 billion senior unsecured bank credit facility of the new combined entity has been assigned a rating of Baa2.

The outlook is now stable.

Moody's said the ratings incorporate potential integration and execution risks associated with combining two companies of this size. However, Moody's said it anticipates that management will be aggressive in cutting costs to stabilize, and possibly improve, operating margins, as they have successfully done to date at Moore Wallace.

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