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27 Jan 2014
New York, January 27, 2014 -- Moody's said Harland Clarke Holdings Corp.'s (Harland
Clarke) upsize of the term loan B3 from $500 million to $600
million and downsize of the senior unsecured notes from $590 million
to $540 million will not impact its B2 Corporate Family Rating.
The B1 ratings are unchanged on the term loan B2, B3, senior
secured notes due 2018, and proposed senior secured notes due 2020,
but the LGD point estimates change from LGD3 39% to 41%.
The Caa1 rating on the proposed $540 million senior unsecured notes
is unchanged but the point estimates change from LGD5 89% to LGD6
91% reflecting the increased amount of secured debt ahead of it
in the capital structure.
For additional information, see Issuer Comment on moodys.com.
RATINGS RATIONALE
The principal methodology used in this rating was the Global Publishing
Industry published in December 2011. Other methodologies used include
Loss Given Default for Speculative-Grade Non-Financial Companies
in the U.S., Canada and EMEA published in June 2009.
Please see the Credit Policy page on www.moodys.com for
a copy of these methodologies.
Harland Clarke Holdings Corp. ("Harland Clarke"), headquartered
in San Antonio, TX, is a provider of check and check-related
products, direct marketing services and customized business and
home office products to financial services, retail and software
providers as well as consumers and small business, and through its
Scantron business, data collection, testing products,
scanning equipment and tracking services to educational, commercial,
healthcare and government entities. M&F Worldwide Corp.
("M&F") acquired check and related product provider Clarke American
Corp. ("Clarke American") in December 2005 for $800 million
and subsequently acquired the John H. Harland Company ("Harland")
in May 2007 for $1.4 billion. M&F merged Clarke
American and Harland to form Harland Clarke. M&F's remaining
publicly traded shares were acquired by portfolio company, MacAndrews
& Forbes Holdings Inc (MacAndrews) on December 21, 2011.
MacAndrews is wholly owned by Ronald O. Perelman. Harland
entered into an agreement to acquire Valassis Communications, Inc.
("Valassis") on December 17, 2013. Valassis is headquartered
in Livonia, Michigan, provides promotional and advertising
products including Shared Mail, Neighborhood Targeted, Free
Standing Inserts, and International, Digital Media,
& Services (coupon clearing, consulting and analytic services).
We expect revenue of combined companies to be over $3 billion over
the next twelve months.
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Scott Van den Bosch
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
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John Diaz
MD - Corporate Finance
Corporate Finance Group
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Moody's says Harland Clarke's upsize of term loan does not affect the ratings
No Related Data.
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