S&P rates SCI notes BB

S&P said it assigned a BB rating and 5 recovery rating to Service Corp. International's (SCI) proposed $750 million senior unsecured notes.

The 5 recovery rating indicates 10% to 30% expected default recovery.

The proceeds will be used to repay the outstanding borrowings under the company's revolver and redeem its senior notes due 2022, S&P said.

The analysis incorporates the full redemption of the 2022 notes, which would have become callable at par in July 2019, the agency said.

The BB+ issuer credit rating reflects the company's narrow, but leading position as a provider of funeral and cemetery services, S&P said.

The company has a publicly stated net leverage target range of 3.5x to 4x, the agency noted.

S&P said it expects adjusted leverage will remain in the mid-3x to low-4x range over the next few years.

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