August 9, 2012 / 7:46 PM / in 5 years

TEXT-S&P rates the ServiceMaster's term loan 'B+'

Aug 9 - Standard & Poor's Ratings Services said today it assigned its 'B+'
senior secured debt rating to Memphis, Tenn.-based The ServiceMaster Co.'s
proposed tranche B term loan due January 2017, which the company estimates will
be about $1 billion. The tranche B term loan would extend a portion of its
existing $2.5 billion secured term loan facility due in July 2014. The recovery
rating on the secured term loan is '2', indicating our expectation of
substantial recovery (70%-90%) to debtholders in the event of a default. 

We expect this transaction, together with the recently issued $1 billion of 
6.125% senior unsecured notes, to be essentially leverage neutral as the 
company will use proceeds from both transactions primarily to repay existing 
debt. As such, we estimate the company's debt to EBITDA leverage will remain 
relatively unchanged, which was about 6.5x for the 12 months ended June 30, 
2012. The company had approximately $3.9 billion of reported debt outstanding 
as of June 30, 2012.

The ratings on ServiceMaster reflect our view that the company's financial 
profile continues to be "highly leveraged," particularly because the company's 
balance sheet remains highly leveraged and we expect cash flow protection 
measures to continue to be weak. In addition, we continue to consider 
ServiceMaster's business risk profile to be "fair," reflecting our view that 
the company's business will remain sensitive to still-weak economic 
conditions, consumer spending, and seasonal weather conditions. Still, 
ServiceMaster benefits from its business positions in its fragmented and 
competitive end markets, which have historically translated into good cash 
flow generation from a fairly diverse portfolio of services.

     -- Methodology And Assumptions: Liquidity Descriptors For Global 
Corporate Issuers, Sept. 28, 2011
     -- Key Credit Factors: Criteria For Rating The Global Branded Nondurable 
Consumer Products Industry, April 28, 2011
     -- Criteria Guidelines For Recovery Ratings On Global Industrials 
Issuers' Speculative-Grade Debt, Aug. 10, 2009
     -- Business Risk/Financial Risk Matrix Expanded, May 27, 2009
     -- Corporate Ratings Criteria 2008, April 15, 2008


The ServiceMaster Co.
 Corporate Credit Rating                         B/Stable/--

New Rating

The ServiceMaster Co.
 Sr secd tranche B term loan due January 2017    B+
  Recovery Rating                                2

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at Use the Ratings search box located in the left 

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below