S&P lowers ServiceMaster view to negative

S&P said it revised the outlook to negative from stable and affirmed its BB- corporate credit rating on the ServiceMaster Co. LLC.

The outlook revision reflects an assessment of the uncertain nature of the company's future litigation proceedings and the company's ability to maintain its strong liquidity profile, S&P said.

The recent surprise settlement of the U.S. Virgin Islands case was significantly worse, from a company perspective, than previous assumptions, the agency explained.

The civil settlement of its U.S. Virgin Islands fumigation case was for $88 million dollars, in addition to liability insurance coverage, which is significantly above the company's guidance, S&P said.

The agency said it assumed that the company's liability insurance would cover civil damages.

Although S&P said it continues to expect outstanding litigation to be resolved without severe financial recourse to the company, another material surprise cash settlement would likely lead to a reassessment of the company's liquidity and a downgrade of the company’s ratings.

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