SOURCE: Bowne & Co., Inc.

May 01, 2008 17:40 ET

Moody's Upgrades Bowne Convertible Notes to B1

$75 Million of Rated Debt Affected

NEW YORK, NY--(Marketwire - May 1, 2008) - Moody's Investors Service upgraded the corporate family rating of Bowne & Co., Inc. (NYSE: BNE) to Ba2 from Ba3 and the rating on its convertible subordinated notes to B1 from B2. In conjunction with the upgrade, Moody's changed the ratings outlook to stable from positive. Moody's stated that the action follows substantial improvement in free cash flow generation (free cash flow-to-debt exceeded 20% for 2007), some margin improvement and a moderation of the share repurchase program. Furthermore, in Moody's view, Bowne has developed adequate business diversification to withstand the downturn in capital markets.

Moody's stated that the stable outlook assumes that Bowne will continue to generate free cash flow in excess of 5% of debt, margins will remain above 12% (all metrics as per Moody's standard adjustments) and the company will maintain strong liquidity. According to Moody's the current ratings level could tolerate continued cash financed acquisitions in line with the historic pattern (less than $50 million purchase price) provided leverage remains around 3 times debt-to-EBITDA (as per Moody's standard adjustments) and margins do not contract. A summary of Moody's actions, which occurred on April 21, 2008, follows.

Bowne & Co., Inc.

--  Corporate Family Rating, Upgraded to Ba2 from Ba3
--  Probability of Default Rating, Upgraded to Ba2 from Ba3
--  Subordinate Convertible Bonds, Upgraded to B1 from B2
--  Outlook, Changed To Stable From Positive

Moody's cited Bowne's strong liquidity, moderate leverage (2.9 times debt-to-EBITDA for 2007, as per Moody's standard adjustments, including treatment of pension obligations as debt) and considerable stream of recurring revenue support its Ba2 corporate family rating. Moody's said the rating also reflects the seasonality and volatility of its free cash flow, its exposure to the capital markets cycle, some vulnerability to the reduction in demand for printed products, and some execution and acquisition risk.

According to Moody's, bondholders could put the $75 million convertible notes to Bowne for cash in October of 2008. Moody's stated that it believes Bowne has adequate liquidity from its balance sheet cash (approximately $100 million as of 2007 year end) and $150 million (unrated) revolving credit facility to satisfy this potential obligation, should bondholders exercise this option. For more information, please refer to the credit opinion posted on

About Bowne & Co., Inc.

Bowne & Co., Inc. (NYSE: BNE) provides shareholder and marketing communications services around the world. Dealmakers rely on Bowne to handle critical transactional communications with speed and accuracy. Compliance professionals turn to Bowne to prepare and file regulatory and shareholder communications online and in print. Marketers look to Bowne to create and distribute customized, one-to-one communications on demand. With 3,400 employees in 60 offices around the globe, Bowne has met the ever-changing demands of its clients for more than 230 years. For more information, please visit

Contact Information

  • Investor Relations Contact:
    John J. Walker
    SVP & Chief Financial Officer

    Media Contact:
    Pamela Blum
    Manager, Corporate Communications

    Bowne & Co., Inc.
    55 Water Street
    New York, NY 10041
    (212) 924-5500
    Fax: (212) 658-5871