Moody's may cut Aramark to junk

Moody's Investors Service said it placed the Baa3 senior unsecured note ratings of Aramark Corp. and its subsidiary, Aramark Services Inc., on review for possible downgrade following Aramark's announcement that it received a proposal from a group of investors led by Aramark chairman and chief executive officer Joseph Neubauer to acquire all of the company's outstanding shares of common stock for $32 per share in cash.

The agency said the ratings could be downgraded to B if the transaction is completed.

The proposal letter indicates that the transaction would be financed through a combination of equity and about $6.25 billion of debt financing. The review for downgrade reflects Moody's expectation that there would be a substantial increase in debt levels and weakening of credit metrics if the offer is accepted as proposed.

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