Morningstar Publishes List of Corporate Bonds to Avoid

            Morningstar Publishes List of Corporate Bonds to Avoid

PR Newswire

CHICAGO, Feb. 20, 2013

CHICAGO, Feb. 20, 2013 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a
leading provider of independent investment research, today published its
quarterly list of "Bonds to Avoid," including analyst commentary about
corporate credits.

Morningstar's Bonds to Avoid list represents the debt of companies that its
analysts believe are unattractive, based on Morningstar's corporate credit
rating and other factors including event risk, such as an impending
acquisition, special dividends, or share repurchases; deteriorating
fundamentals, including those driving a negative Morningstar® Moat Trend™
Rating; poor management; or a poor Distance to Default score.

Companies on the list of 18 corporate credits include:

  oWalgreen, Morningstar Corporate Credit Rating BBB
    Morningstar doesn't believe the bond market is adequately pricing in the
    risks associated with Walgreen's option to purchase the rest of Alliance
    Boots, which could significantly lever up the balance sheet, or the firm's
    weakening position in the drug supply chain, which is highlighted by its
    negative Economic Moat Trend rating.
  oDirectv, Morningstar Corporate Credit Rating BBB
    Morningstar believes that management's consistent adherence to a leverage
    target of 2.5 times EBITDA and the potential for change in the television
    business over the next several years could cause cash flow and credit
    metrics to deteriorate, pulling spreads wider still.
  oPitney Bowes, Morningstar Corporate Credit Rating BBB-
    In late 2011, Morningstar downgraded its credit rating on Pitney Bowes to
    BBB- following its decision to lower the Economic Moat rating on the
    company from Narrow to None, and believes that continued investments in
    Pitney's no-moat business lines may further dilute the company's remaining
    competitive advantages over time, leading to steadily declining credit

"Our list includes companies in continually declining industries with eroding
moats, or competitive advantages, such as Pitney Bowes, to names in which we
see meaningful event risk, like Walgreen," said Rick Tauber, Morningstar's
director of corporate bond research. "We aim to offer investors an objective
assessment of a company's financial health through a unique perspective as our
analysts evaluate companies across the credit spectrum. Our list highlights
companies that present excessive risk for which we believe investors are not
appropriately rewarded."

The company updates its Bonds to Avoid list and commentary quarterly.
Morningstar began publishing a list of Bonds to Avoid for corporate credit in
August 2012. Morningstar's corporate credit analysts also publish their "Best
Ideas" across investment grade, high-yield, and convertible bonds monthly, in
addition to new issue notes, credit notes related to earnings and other news,
and sector reports across their coverage universe.

Morningstar has about 120 global equity and credit analysts who cover
approximately 1,700 companies; 700 of those companies have a corporate credit
rating. The company launched corporate credit ratings in 2009, and assigns the
ratings on a letter scale from AAA, which indicates extremely low default
risk, to D, which indicates payment default.

Morningstar's corporate credit ratings are available on®, the
company's individual investor website. More information about Morningstar's
corporate credit research offerings and methodologies are available at The
complete list of 18 Bonds to Avoid in corporate credit is available through
Morningstar Select, the company's institutional equity research portal. For
access, institutional investors may contact 

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in
North America, Europe, Australia, and Asia. The company offers an extensive
line of products and services for individuals, financial advisors, and
institutions. Morningstar provides data on approximately 416,000 investment
offerings, including stocks, mutual funds, and similar vehicles, along with
real-time global market data on more than 9 million equities, indexes,
futures, options, commodities, and precious metals, in addition to foreign
exchange and Treasury markets. Morningstar also offers investment management
services through its registered investment advisor subsidiaries and has
approximately $149 billion in assets under advisement and management as of
Dec. 31, 2012. The company has operations in 27 countries.

Morningstar's corporate credit ratings are assigned by equity and credit
analysts at Morningstar, Inc., which is not registered as a Nationally
Recognized Statistical Rating Organization (NRSRO). Opinions expressed above
are subject to change and should not be considered a guarantee or a
solicitation to buy or sell securities of any of the above issuers.

©2013 Morningstar, Inc. All rights reserved.


Media Contact:
Nadine Youssef, +1 312-696-6601 or

SOURCE Morningstar, Inc.

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