S&P: ServiceMaster loan B+

Standard & Poor's said it assigned a B+ senior secured debt rating to the ServiceMaster Co.'s proposed $2.253 billion secured term loan due 2017.

The recovery rating on the secured term loan is 2, indicating 70% to 90% expected default recovery.

The proceeds will be used to refinance the outstanding roughly $1.2 billion secured term loan due 2014 and $1 billion secured term loan due 2017.

While total reported debt is expected to remain relatively unchanged at about $4 billion, S&P said it estimates debt-to-EBITDA leverage will increase to the mid-7x range for full year 2012 and could rise to the high-7x range during the first half of 2013 as a result of lower EBITDA amid weak performance at its TruGreen lawn care segment.

But, leverage is expected to decline to the low 7x range by year-end 2013 as the company benefits from modest growth in its Terminix business, partly as a result of full year operation of 2012 acquisitions, the agency said.

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