Moody's: Avery Dennison stable

Moody's Investors Service said it changed Avery Dennison Corp.'s outlook to stable from negative and affirmed its senior notes at Baa2 and commercial paper at Prime-2. Also affirmed were ADOP Co.'s Baa2 senior guaranteed notes due 2017.

The outlook change reflects Moody's belief that it is likely that Avery will be able to generate stronger credit metrics in 2011 and 2012 than in 2010. The benefits from an improving retail market, successful cost-cutting programs, improvements in working capital management and solid growth in developing countries should enable the company to report increasing earnings despite the prospect of a slow recovery in the United States and Europe, the agency said.

Avery's Baa2 ratings are supported by a relatively stable historic business profile and by management's efforts at reducing absolute debt levels and instituting cost-saving and restructuring programs designed to improve and generate cash flow, Moody's said.

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