S&P trims CSC ServiceWorks view to negative

Standard & Poor’s said it affirmed its B corporate credit rating on Spin Holdco Inc. (doing business as CSC ServiceWorks) and revised the outlook to negative from stable.

At the same time, S&P affirmed its B issue-level rating on the company’s first-lien debt, which includes the $120 million revolving credit facility and $1.54 billion term loan. The recovery rating is 3, reflecting an expectation for meaningful recovery (50% to 70%, at the higher end of the range) in the event of a payment default.

“The outlook revision to negative reflects the risk that Spin Holdco may continue to generate negative free cash flow and be unable to realize credit measure improvement,” said S&P credit analyst Katherine Heng in a news release.

“In particular, we believe the large-scale Mac-Gray and AIR-serv acquisitions made a few years ago have proven difficult to integrate, and that the company could be vulnerable to credit measure and financial covenant violations should the operating environment deteriorate.”

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