Moody’s upgrades office supplier Acco Brands on improving operations

Moody’s upgrades office supplier Acco Brands

NEW YORK — Moody’s Investors Service has raised Acco Brands Corp.’s corporate family and probability of default ratings, saying the office products company is strengthening its credit metrics by improving operations and addressing a tough industry.

Moody’s upgraded the two ratings to B2 from B3. It also affirmed Acco’s SGL-2 speculative grade liquidity rating. The rating outlook on the company, based in Lincolnshire, Ill, is stable. Moody’s also boosted the company’s senior subordinated note rating to Caa1 from Caa2 and the senior secured note rating to B1 from B2.

Moody’s said the company still have relatively high leverage, negative pressure on profits due to slumping volumes in the U.S. and elsewhere, including Canada and Europe.

“The rating also incorporates the mature nature of the office supplies industry which has been exacerbated by economic weakness in the U.S. and Europe,” Moody’s said in a news release.

Moody’s said ACCO has a solid market position and is improving its margins by bettering its cost structure. The company also has good cash flow generation and liquidity, “that provides financial flexibility to continue to weather the challenging economic environment.”

Shares of Acco Brands fell 30 cents, or 4.4 percent, to $6.50 in afternoon trading Thursday.