Moody's rates American Residential notes B2

Moody's Investors Service said it assigned a B2 corporate family rating, a B2 probability of default rating and a B2 rating to the $150 million of proposed senior secured second-lien notes of American Residential Services LLC.

The outlook is stable.

The proceeds are expected to be used to repay existing secured debt and pay related fees and expenses. ARS Finance, Inc. will be a co-borrower under the note indenture.

The ratings reflect the company's exposure to weather conditions, the possibility that high unemployment rates and tight credit market conditions could lead consumers to defer purchases or self-repair, a short track record of positive free cash flow and risks related to its acquisition strategy, Moody's said.

The ratings are supported by steady financial performance during 2009 despite difficult market conditions, the significant emergency service component of its revenues, a geographically diverse branch network and a track record of effectively acquiring and integrating acquisitions, the agency said.

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