Lexmark Assigned BBB- Stock Rating Due To $1.2 Billion of Debt

[Anonymous]

Lexmark Assigned BBB- Stock Rating Due To $1.2 Billion of Debt
Assigns Initial 'BBB-' Ratings to Lexmark International; Outlook Stable

NEW YORK, Aug 11, 2014 (BUSINESS WIRE) — Fitch Ratings has assigned initial ratings to Lexmark International, Inc. (Lexmark) as follows:

–Issuer Default Rating (IDR) 'BBB-';–Senior unsecured revolving credit facility (RCF) 'BBB-'; and–Senior unsecured debt 'BBB-'.The Rating Outlook is Stable.

Fitch's action affects approximately $1.2 billion of debt, including Lexmark's undrawn $500 million RCF.

KEY RATING DRIVERS

The ratings and Outlook reflect Lexmark's:–Consistent FCF from recurring revenue: Fitch expects free cash flow will remain above $225 million annually supported by annuity revenue that represents approximately 70% of total revenue. The growth of annuity revenue provides a more predictable revenue stream that reduces volatility in an economic downturn.

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August 12, 2014 at 11:33 AM