Financial Technology - Ratings and Research
Fitch places Broadridge Financial ratings on Rating Watch Positive
November 03, 2009 7:55 PM ET
By Zaeem Shoaib
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Fitch Ratings on Nov. 3 placed Broadridge Financial Solutions Inc.'s issuer default, senior unsecured revolving credit facility and senior unsecured debt ratings of BBB on Rating Watch Positive. The ratings actions reflect the agency's belief that the company's credit profile will improve due to the announced divestiture of the clearing client contracts at its securities clearing unit Ridge Clearing & Outsourcing Solutions Inc. Also, the ratings actions take into account the company's reduced leverage during the past year from the repurchase of about $125 million of its notes outstanding. The ratings are supported by Broadridge Financial's leading share in the proxy distribution market, which Fitch views as having minimal competitive threats and pricing largely insulated by SEC regulations; the company's investor communications and securities processing business segments producing steady free cash flow with minimal exposure to economic volatility; and long-term customer contracts and customer relationships in both core businesses, among other things. Fitch's ratings concerns include the changing regulations that might negatively impact Broadridge Financial's business, particularly related to the proxy distribution business, and the increasing competition the company faces in its securities processing business and the nascent outsourcing business, among other things. | 
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