S&P lifts ServiceMaster view to stable

S&P said it revised the outlook on ServiceMaster Global Holdings Inc. and ServiceMaster Co. LLC to stable from negative.

ServiceMaster has completed the monetization of its 19.8% stake in Frontdoor Inc., S&P said.

The proceeds will be used to reduce the company's debt.

The debt repayment will reduce its leverage to the low-3x range, which compares with the mid-4x range prior to the debt reduction, S&P said.

The agency also said it affirmed all of the ratings on ServiceMaster, including its BB- issuer credit rating because it is performing slightly better than expected, particularly in its Terminix division.

The stable outlook reflects am expectation that ServiceMaster will continue to invest in digital platforms to enhance its service quality to organically grow its termite and pest control businesses, the agency said.

The stable view also considers that company will use most of its free operating cash flow to undertake tuck-in acquisitions in the commercial channel and expand into new territories while maintaining leverage of about 3x, S&P said.

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