S&P: Bowne outlook positive

Standard & Poor's said it revised its outlook on Bowne & Co. to positive from negative and affirmed its ratings, including the B corporate credit rating.

The outlook revision follows the announced pricing of the company's common stock offering of 10.5 million shares at $5.96 per share. The proceeds will be used to repay the company's term loans in their entirety, with the remaining proceeds to be used to repay outstanding obligations under its revolving credit facility.

The agency said the positive outlook reflects the improvement in the company's financial profile attributable to the reduction in its debt leverage and the elimination of required quarterly amortization payments on its term debt. And despite its belief that difficult operating conditions will continue to affect Bowne's major business segments, S&P expects that the company will generate sufficient free cash flow in the second half of 2009 to provide the flexibility for additional repayment on its revolver.

The B corporate credit rating reflects Bowne's concentration in the competitive financial print business and its exposure to the volatility related to transaction-based financial printing volumes, S&P said.

The total debt-to-EBITDA ratio was 7.7 times for the 12 months ended June 30. Pro forma for the equity issuance and repayment of debt, this ratio is about 6.1 times.

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