S&P rates Bemis notes BBB

Standard & Poor's said it assigned its BBB issue rating to Bemis Co. Inc.'s proposed $400 million of senior unsecured notes due 2021.

Bemis will use the note proceeds to repay existing commercial paper borrowing. The company then intends to use additional commercial paper borrowings to pay the principal of its $300 million of 4.875% notes when they come due on April 1, 2012, according to an S&P news release.

S&P said the existing ratings on Bemis, including the BBB long-term corporate credit rating and A-2 short-term rating, are unchanged. The outlook is positive.

The ratings on Bemis reflect its strong business position as a leading producer of value-added flexible packaging and its intermediate financial risk profile, S&P said. S&P could raise the ratings during the next several quarters if Bemis can achieve and maintain funds from operations to total adjusted debt of about 35%, the agency said.

However, additional smaller acquisitions, share repurchases, a lag in passing on raw material cost increases, and softness in consumer demand for some packaged foods are slowing the improvement in financial ratios.

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