Moody’s lowers Pitney Bowes

Moody's Investors Service said it downgraded Pitney Bowes, Inc.'s senior unsecured debt ratings to Baa3 from Baa2, along with the short-term rating to P-3 from P-2.

Moody's also said it downgraded the preferred instrument rating at Pitney Bowes International Holdings to Ba2 from Ba1.

The outlook is stable.

The downgrades reflect the slower-than-anticipated revenue and cash flow contributions from the company's digital commerce and software businesses, which have not grown to overcome the secular declines in the company's legacy mailing business, Moody’s said.

Despite the company’s efforts to improve its operating platforms and cost structure, the company's adjusted debt-to-EBITDA leverage has recently risen at more than 3xwhile free cash flow generation remains depressed amid restructuring expenses, the agency said.

Even if the company's strategic efforts play out over the next two years, its credit metrics would not be within the current expectations for the Baa2 rating category, Moody’s said.

The ratings also consider Pitney Bowes' strong leadership in its postal metering business and a demonstrated commitment to maintain strong credit protection measures, the agency said.

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