S&P rates Kellermeyer Bergensons loans B, CCC+

Standard & Poor’s said it assigned a B corporate credit rating to Kellermeyer Bergensons Services LLC.

The agency also said it assigned a B rating to the company’s new $30 million senior secured revolving credit facility and $148 million senior secured first-lien term with a recovery rating of 3, indicating 50% to 70% expected default recovery.

S&P also said it assigned a CCC+ rating to the company’s new $65 million senior secured second-lien term loan with a recovery rating is 6, reflecting 0 to 10% expected default recovery.

The outlook is stable.

The ratings reflect an expectation that the company’s leverage will materially increase to about 7x with the sale of the company to private equity sponsor GI Partners, from about 4x prior to the acquisition, S&P said.

The agency also said it expects positive operating performance over the next year, which will improve credit metrics.

The ratings also consider the company’s small size and narrow focus in the highly competitive and fragmented outsourced janitorial services industry, S&P added.

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