S&P trims Quad/Graphics, rates new loan BB-, notes B

Standard & Poor's said it lowered its corporate credit rating on Quad/Graphics Inc. to BB- from BB. The outlook is stable.

At the same time, S&P assigned the company's proposed $1.6 billion senior secured credit facility a BB- issue-level rating, with a recovery rating of 3, indicating an expectation for meaningful (50%-70%) recovery in the event of a payment default. The facility consists of an $850 million revolving credit facility due 2019, $450 million term loan A due 2019 and $300 million term loan B due 2021.

In addition, S&P assigned the company's proposed $300 million senior unsecured notes a B issue-level rating, with a recovery rating of 6, indicating an expectation for negligible (0% to 10%) recovery in the event of a payment default.

S&P said the downgrade reflects the increase in adjusted leverage beyond S&P's 3x threshold for the company at a BB rating, where S&P expects it will remain as the company combats low- to mid-single-digit percent annual organic revenue declines, amid long-term structural declines in most of its end markets.

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