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Moody’s lowers Service King
Moody’s Investors Service said it downgraded Midas Intermediate Holdco II, LLC’s (Service King) probability of default rating to Caa2-PD from Caa1-PD and the senior unsecured notes rating to Caa3 from Caa2.
At the same time, Moody’s affirmed the company’s Caa1 Corporate Family Rating and the B2 rating on its senior secured bank credit facility.
“The downgrade of the PDR and senior unsecured notes rating recognizes the elevated risk due to Service King’s looming August 2021 revolver and term loan maturities and potentially lower recovery on the senior unsecured notes that mature in 2022,” said Charlie O’Shea, a Moody’s vice president, in a press release.
“There is a real possibility that a refinance of the revolver and term loan will result in less flexibility going forward, which would impair Service King’s ability to grow, as well as reduce free cash flow,” continued O’Shea.
However, the company’s strategy could turnaround weak operating trends, O’Shea said.
The outlook remains negative.
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