S&P lifts ServiceMaster view to stable

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

The agency also said it assigned a BB- corporate credit rating and stable outlook to the parent company in the group, ServiceMaster Global Holdings Inc., the guarantor of the ServiceMaster's debt.

S&P also said it affirmed the BB+ rating on ServiceMaster's first-lien credit facility. The recovery rating remains at 1, indicating 90% to 100% expected default recovery.

The agency also said it affirmed the BB- rating on the company's unsecured notes. The recovery rating remains at 4, indicating 30% to 40% expected default recovery.

The outlook revision reflects a belief that the company's litigation risk is manageable and that its steadily improving operating performance and credit metrics allow the group to better withstand unexpected adverse outcomes, S&P said.

ServiceMaster has settled U.S. Virgin Islands and Florida civil fumigation cases with the respective families without further financial claims, the agency said.

While the Department of Justice still has a criminal and a civil case against the company regarding the Virgins Islands incident, S&P said it does not believe the financial settlements will have a material drag on the company's credit metrics.

The stable outlook reflects a view that ServiceMaster is expected to gradually strengthen its credit metrics by growing EBITDA and maintaining stable debt levels, the agency added.

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