May 30, 2012 / 8:08 PM / 5 years ago

TEXT-S&P rates Cenveo term loan 'BB-'

May 30 - Standard & Poor's Ratings Services said today that its 'BB-' issue
rating on Cenveo Corp.'s senior secured debt due 2016 is not changed by
the $65 million add-on. The recovery rating of '1', indicating our expectation
of very high (90% to 100%) recovery for lenders in the event of a payment
default is unchanged. Cenveo Corp. is a subsidiary of Stamford, Conn.-based
diversified printing company Cenveo Inc. The issue rating is two notches above
the 'B' corporate credit rating on the parent. 	
	
We expect Cenveo to use net proceeds to pay down its revolving credit 	
facility.  The company also plans to amend its credit agreement to allow the 	
company to use its revolving credit facility to redeem the 7.875% senior 	
subordinated notes due 2013.	
	
The corporate credit rating on Cenveo Inc. is 'B', with a negative rating 	
outlook. The rating reflects our expectation that Cenveo's leverage will 	
remain high and coverage will remain weak. For these reasons, we consider 	
Cenveo's financial profile "highly leveraged" (based on our criteria). We view 	
the company's business risk profile as "weak" (based on our criteria) because 	
of Cenveo's participation in the highly competitive and cyclical printing 	
market. We expect ongoing pricing pressure from industry overcapacity and 	
limited scope for margin improvement. Over the near term, we expect this will 	
result in flat- to lower-organic revenue. Our negative outlook reflects the 	
potential for a downgrade as the Dec. 1, 2013 maturity date of the remaining 	
balance on its notes approaches. We could lower our rating if the balance of 	
the notes due 2013 remains meaningful, the company's margin of compliance 	
declines to 10% or lower, discretionary cash flow contracts to less than $50 	
million, and we become increasingly convinced that the company's cash flow 	
generation and liquid resources may be insufficient to meet its 2013 	
obligations.	

RELATED CRITERIA AND RESEARCH	
     -- Criteria Guidelines For Recovery Ratings, Aug. 10, 2009	
     -- Business Risk/Financial Risk Matrix Expanded, May 27, 2009	
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008	
	
RATINGS LIST	
	
Cenveo Inc.	
 Corporate Credit Rating                     B/Negative/--	
	
Senior Secured	
  $445 million term loan due 2016            BB-	
   Recovery Rating                           1	
	
	
Complete ratings information is available to subscribers of RatingsDirect on 	
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 	
by this rating action can be found on Standard & Poor's public Web site at 	
www.standardandpoors.com. Use the Ratings search box located in the left 	
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