S&P: Service debt on negative watch

Standard & Poor's said it affirmed the BB corporate credit rating on Service Corp. International and placed the BB- rating on its senior unsecured debt on CreditWatch with negative implications.

The debt ratings were placed on negative watch because the size of this debt class may increase substantially relative to the estimate of the enterprise's value in the event of default, S&P said. The company announced that it will acquire Stewart Enterprises Inc. in an all-cash transaction.

The current recovery rating on the senior unsecured debt is 5, indicating 10% to 30% expected default recovery.

The ratings reflect the company's good cash flow generation, which will allow for some rapid deleveraging, the agency said.

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