New York, June 19, 2012 -- Moody's Investors Service downgraded Merrill Corporation's Probability of Default Rating to Ca from Caa2, Corporate Family Rating to Caa3 from Caa1, first lien senior secured credit facilities to Caa1 from B2, and the second lien senior secured term loan to Ca from Caa3. All ratings were placed on review for further downgrade due to the imminent maturity of the company's revolving credit facility on June 29, 2012.

According to Moody's Analyst Ben Nelson, "Merrill has been able to make the necessary operational adjustments to restore about half of its recession-era decline in EBITDA and this has improved its credit metrics, but the combination of a thin free cash flow cushion, retrenchment in the capital markets over the past two months, and imminent debt maturities has raised the specter of a deemed default event."

Actions: ..Issuer, Merrill Corporation....Probability of Default Rating, downgraded to Ca from Caa2, on review

....Corporate Family Rating, downgraded to Caa3 from Caa1, on review

...Outlook, Rating Under Review (revised from negative)

..Issuer, Merrill Communications LLC

....First Lien Senior Secured Credit Facilities, downgraded to Caa1(LGD2 18%) from B2, on review

....Second Lien Senior Secured Term Loan, downgraded to Ca (LGD4 65%) from Caa3, on review

..Outlook, Rating Under Review (revised from negative)

RATINGS RATIONALE

Today's rating action was prompted by a lack of definitive progress towards refinancing upcoming debt maturities that in Moody's view has heightened default risk. Merrill is not expected to have sufficient cash to repay outstanding cash advances against its $40 million first lien senior secured revolving credit facility that matures on June 29, 2012. The company must also address the upcoming maturity of its $374 million first lien senior secured term loan due December 2012 and $200 million second lien senior secured term loan due November 2013.

The review for downgrade will focus on Merrill's plans to refinance or restructure its debt obligations. Moody's deems a default to have occurred when a payment of principal or interest is not made by the end of a grace period without regard to lender acceleration or forbearance.

Moody's would downgrade Merrill's ratings if the company does not refinance its revolving credit facility that matures on June 29, 2012. The ratings could be upgraded if Merrill successfully addresses its debt maturities.

The principal methodology used in rating Merrill Corporation was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. 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.

Headquartered in St. Paul, Minnesota, Merrill Corporation provides a range of document and data management services, litigation support, branded communication programs, fulfillment, imaging, and printing services organized along two main business segments: Legal and Financial Transaction Services ("LFTS") and Marketing and Communication Solutions ("MCS"). The company generated $788 million of revenue for the twelve months ended October 31, 2011.

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Benjamin Nelson Analyst Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Alexandra S. Parker MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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