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Fitch Rates Pitney Bowes Inc.'s Proposed Offering 'BBB-'



  Fitch Rates Pitney Bowes Inc.'s Proposed Offering 'BBB-'

Business Wire

NEW YORK -- February 27, 2013

Fitch Ratings has assigned a 'BBB-' rating to Pitney Bowes Inc.'s (Pitney
Bowes) proposed offering of retail notes due 2043. Note proceeds will be
primarily used to fund the tender offers described below. Fitch views the
transaction as a slight credit positive as it will improve Pitney Bowe's
near-term liquidity by pushing out upcoming maturities. The retail notes will
be unsecured obligations and pari passu with existing debt at Pitney Bowes.

In conjunction with proposed offering, the company also announced cash tender
offers for its 4.875% Notes due 2014, 5.000% Notes due 2015, and 4.750% Notes
due 2016. The maximum tender that can be accepted will be $160 million of the
2014 Notes, $100 million of the 2015 Notes, and $50 million of the 2016 Notes.

The tender offers partially address the material annual maturities Pitney
Bowes faces over the next several years. As of Dec. 31, 2012, Pitney Bowes'
total debt was $4.3 billion, consisting of:

i) $3.7 billion of senior unsecured debt, consisting of 10 notes maturing
between 2013 - 2022 and one maturing in 2037 ($500 million);

ii) $230 million in term loans due in 2015/2016; and

iii) $300 million of variable-term voting preferred stock in the company's
subsidiary, PBIH. Under Fitch's hybrid security criteria, Fitch assigns 0%
equity credit given the less than five-year maturity (based on the October
2016 call date).

LIQUIDITY

Pitney Bowes' liquidity position at Dec. 31, 2012 was solid, consisting of: i)
$913 million of cash; and ii) an undrawn $1 billion revolving credit facility
(RCF) maturing in April 2016, which backstops the company's $1 billion
commercial paper (CP) program. Liquidity is further supported by the company's
annual free cash flow generation.

Fitch recognizes that Pitney Bowes can address its maturities organically with
its pre-dividend FCF generation. The company appointed its new President and
CEO in December of 2012 and has indicated that they will provide more
information related to its capital deployment at its investor meeting in May
2013.

LEVERAGE

Fitch calculates total consolidated gross leverage as of Dec. 31, 2012 at 4.0
times (x) an improvement from 2011's 4.2x. This excludes $340 million in debt
recently issued to prefund the June 2013 $375 million senior unsecured note
maturity. The company reduced absolute debt by $550 million in 2012, which
improved core leverage by a half a turn.

KEY RATING DRIVERS

The ratings are supported by: the significant and entrenched market position
in the core U.S. Mailing business, characterized by approximately 80% share of
the postage meter market and limited competitive pressures; the necessity of
mail equipment and services to conduct business across all industries; and the
diversity of the company's customer base, from both an industry and size
perspective.

Ratings concerns include: secular and cyclical pressures inherent in the
business; top-line declines; and a potentially more aggressive financial
policy stemming from secular challenges and underperforming equity.

RATING SENSITIVITIES

In addition to the comments above, ratings may be stabilized if over the next
one to two years Fitch has higher conviction that a successful roll-out of the
digital and customer communications initiatives, in combination with growth in
its enterprise services businesses, will offset declines in its physical
business.

Negative: Future developments that may, individually or collectively, lead to
a negative rating action include:

--Lack of traction in the company's digital initiatives and other growth
businesses amid ongoing declines in the traditional physical business. Also,
sustained revenue declines in the high single digits would pressure the
ratings;

--A sustained increase in total leverage, whether the result of incremental
debt or lower EBITDA;

--Indications of a more aggressive financial policy.

Positive: The current Outlook is Negative. As a result, Fitch's sensitivities
do not currently anticipate a rating upgrade.

Fitch rates Pitney Bowes as follows:

Pitney Bowes

--IDR 'BBB-';

--Senior unsecured revolving credit facility (RCF) 'BBB-';

--Senior unsecured term loan 'BBB-';

--Senior unsecured notes 'BBB-';

--Short-term IDR 'F3';

--Commercial paper (CP) 'F3'.

The Outlook is Negative.

Additional information is available at 'www.fitchratings.com'. The ratings
above were unsolicited and have been provided by Fitch as a service to
investors. The issuer did not participate in the rating process, or provide
additional information, beyond the issuer's available public disclosure.

Applicable Criteria & Related Research:

--'Corporate Rating Methodology' (Aug. 8, 2012);

--'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit
Analysis' (Dec. 13, 2012);

--'Fitch Downgrades Pitney Bowes to 'BBB-'; Outlook Remains Negative' (Feb. 4,
2013).

Applicable Criteria and Related Research

Corporate Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=684460

Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit
Analysis

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696670

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL,
COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM
THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Contact:

Primary Analyst
Rolando Larrondo, +1-212-908-9189
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, New York 1000
or
Secondary Analyst
Shawn Gannon, +1-212-908-0223
Associate Director
or
Committee Chairperson
Mark Oline, +1-312-368-2073
Managing Director
or
Media Relations
Brian Bertsch, +1 212-908-0549 (New York)
brian.bertsch@fitchratings.com
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