Standard & Poor’s Ratings Services lowered its long-term corporate credit rating for Deluxe Corp. to single-‘A’ from single-‘A’-plus. Deluxe maintained its ‘A-1’ short-term corporate credit and commercial paper ratings.
The decision to lower the credit rating was partly based on Deluxe’s announced plan to repurchase 12 million shares of its stock. Deluxe had previously bought back 14 million shares during a period ending in second quarter 2002, for which it paid $463 million.
The repurchase will likely cause St. Paul, MN-based Deluxe to hold higher debt levels, which would cause “Deluxe’s overall financial profile [to] no longer be consistent with the former ratings,” according to a statement from Standard & Poor’s. Deluxe had roughly $200 million in outstanding debt as of June 30, according to Standard & Poor’s.
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