Moody's rates CompuCom note B2

Moody's Investors Service said it assigned a B2 corporate family rating and B2 probability-of-default rating to CompuCom Systems, Inc. and a B2 rating with a loss-given-default rating of LGD4 to its proposed $175 million senior unsecured notes due 2014.

The outlook is stable.

The proceeds of this offering will be used to permanently retire approximately $58 million of notes payable, $50 million of senior subordinated debt, repay the company's accounts receivable securitization facility by approximately $18 million and pay a $45 million dividend to its equity sponsor.

Moody's said CompuCom's B2 corporate family rating is constrained by the company's year-over-year decline in procurement revenue at compounded annual decline in excess of 8% but also consider CompuCom's unique combination of IT service delivery capability and comprehensive procurement and logistics service.

The stable outlook reflects Moody's expectation that the company will reduce its financial leverage and interest coverage metrics, supported by a shift to higher value added IT services and maintain superior service quality offset by further decline in procurement revenue, gradual gross margin erosion of each segment, working capital requirements and increasing competition.

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