MORE BAD NEWS FOR LEXMARK …….

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MORE BAD NEWS FOR LEXMARK …….

 user 2009-05-01 at 3:16:06 pm Views: 54
  • #21869

    http://www.kentucky.com/211/story/778889.html
    Moody’s downgrades Lexmark
    Moody’s
    Investors Service downgraded Lexmark International’s debt rating
    Tuesday, following a similar move earlier this year by Standard &
    Poor’s.

    Richard Lane, a
    Moody’s analyst, cited the company’s lower sales in recent quarters in
    explaining the downgrade, emphasizing “a weak demand environment and
    aggressive competition from a group of larger and more diversified
    competitors.”He lowered the company’s rating from Baa2 to Baa3. That
    remains investment grade. Ratings don’t fall to what’s typically called
    junk status until they’re lowered one more notch to Ba1.Standard &
    Poor’s had lowered the company’s rating to BBB-, its last rating above
    non-investment grade. Lower ratings can mean paying higher interest
    rates on debt.Lexmark spokesman Jerry Grasso emphasized that “Lexmark
    has a very strong financial position.”"Lexmark’s business model
    continues to drive good cash generation,” Grasso said. “And 2008 marked
    the seventh consecutive year where the company generated over $450
    million in net cash from operating activities.”

    Lane said the
    ratings outlook for Lexmark is negative, but he applauded its liquidity
    profile, noting that it had $811 million in cash and equivalents at the
    end of March.Its two pieces of debt, he said, don’t mature until 2013,
    for $350 million, and 2018 for an additional $300 million. He said
    Lexmark also has access to $300 million in unsecured revolving credit
    that matures in January.