S&P: Allied Security outlook negative

Standard & Poor's said it revised its outlook on Allied Security Holdings LLC to negative from stable and affirmed its corporate credit rating at B and its $496.5 million amended senior secured credit facilities at BB- with a recovery rating of 1.

The amended credit facilities include an incremental $11.5 million to the existing $55.0 million revolving credit facility due 2014 and an incremental $100 million to the existing $330 million first-lien term loan B due 2015. The proceeds of the incremental term loan plus existing cash will be used to make a $115 million distribution to equity holders.

The agency said the outlook revision reflects the company's deteriorating credit measures as a result of the debt-financed distribution and S&P's expectation that the company will continue to pursue an aggressive financial policy, thereby limiting meaningful credit measure improvement. The proposed amendment results in leverage increasing nearly one turn to 5.8 times.

The ratings on Allied Security reflect the company's narrow business focus, low barriers to entry, aggressive financial policy and medium-term exposure to potential changes in the structure of health care in the United States, S&P said.

Allied Security benefits from its stable free cash flow and limited cyclicality, the agency added.

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