Moody's confirms Avery Dennison

Moody's Investors Service said it confirmed the senior unsecured debt ratings of Avery Dennison Corp. at Baa1.

The agency affirmed the P-2 commercial paper ratings and confirmed the Baa1 ratings for a senior note issue of Avery Dennison Office Products Co.

The outlook is negative.

Ratings were confirmed as the company completed the terming out of its financing for the Paxar Corp. acquisition, concluding the rating review of Avery's that began in March 2007 after the announced plan to acquire Paxar.

The Baa1 ratings are supported by relatively stable historic earnings and cash flow generation, the agency said.

Ratings also reflect the potential for a weaker credit profile offsetting the strategic benefits of combining these two businesses until the incremental debt is reduced and cash flows improve over time, Moody's said.

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