S&P trims Service King

S&P said it lowered its issuer credit rating on SK HoldCo LLC (Service King) to CCC from CCC+, the issue-level rating on its senior secured debt to CCC from CCC+ and the issue-level rating on its senior unsecured notes to CC from CCC-.

The agency said it revised its assessment of Service King's liquidity to weak because of the July 1, 2022, springing maturity on its term loan, which will cause the entire $775 million term loan to become current if more than $135 million of its $375 million unsecured notes due Oct. 1, 2022, remain outstanding on that date.

“We continue to believe that a debt restructuring is likely. Service King faces continued (albeit less so) weaker collision volumes, increasing labor costs and elevated refinancing risks, thus we view a distressed exchange as increasingly likely as it seeks to address its capital structure and upcoming debt maturities,” S&P said in a press release.

The outlook is negative.

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