S&P lifts American Residential

S&P said it raised the corporate credit rating on American Residential Services LLC to B+ from B.

The agency also said it raised the rating on the company’s first-lien term loan and revolving credit facility to BB- from B and revised the recovery rating to 2 from 3.

The recovery rating of 2 indicates 70% to 90% expected default recovery.

The company’s second-lien term loan is not rated, S&P said.

The outlook is stable.

The upgrades reflects the company’s stronger credit metrics and an expectation that debt-to-EBITDA will remain at less than 5x, S&P said.

There will not be a re-leveraging event with debt-funded acquisitions or dividends in the next 12- to 24-months, the agency said.

The company’s operating performance outpaced expectations primarily because of successful integrations of seven acquisitions in the last two years, primarily funded with internally generated cash, S&P said.

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