S&P rates Sirva loan B

S&P said it assigned a B corporate credit rating to Sirva Inc.

The outlook is stable.

The agency also said it assigned a B rating and 3 recovery rating to subsidiary Sirva Worldwide Inc.’s $300 million first-lien secured term loan due 2022.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The proceeds will be used from the proposed credit facilities to fund the refinancing of its existing debt and for general corporate purposes, S&P said.

The ratings reflect an expectation for high profit volatility over the economic cycle as Sirva’s revenue depends on corporate relocation spending over the business cycle, highly competitive nature of the relocation and moving services market, the company’s limited scale and its financial sponsor ownership and the tendency to increase leverage over time in order to fund distributions to shareholders, S&P said.

Partly offsetting these risk factors are lower home inventory levels and improved risk management regarding the company’s home sale-assistance program since the last economic downturn, the agency said.

The ratings also consider the company’s good market position and well-diversified customer base, Fitch added, and its 98% percent customer retention rate.

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