S&P applies B to TruGreen, facilities

Standard & Poor's said it assigned a B corporate rating to TruGreen LP.

The outlook is stable.

At the same time, the agency assigned its B issue-level rating to the company's proposed first-lien credit facilities, which consist of a $560 million first-lien term loan due 2023 and a $146 million revolving facility expiring 2021. The recovery rating on the first-lien facilities is 3 indicating an expectation for meaningful recovery (50%-70%; at the higher end of the range) in the event of a payment default.

The ratings assume the transactions close on substantially the same terms as presented.

"The ratings on TruGreen reflect its high financial leverage, narrow business focus, strong market share, and efficient operating platform," S&P credit analyst Suyun Qu said in a news release.

"Pro forma for the transaction, leverage is high at about 6x. We expect credit metrics will deteriorate slightly, including debt to EBITDA increasing to about 6.5x, in the second half of 2016 because of costs related to branch consolidation and other one-time integration expenses."

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