S&P moves Outdoor Home view to negative

S&P said it revised its outlook for Outdoor Home Services Holdings LLC (TruGreen) to negative from stable and affirmed all its ratings, including the B issuer rating.

“Leverage increased to 6.6x for the last 12-months-ended July 2022, which is above our prior expectations and approaching our 7x downgrade trigger. The company recently completed a $60 million incremental add-on to its term loan B due 2027 and with the proceeds and balance sheet cash, funded a $164 million shareholder distribution. We view this transaction as aggressive, despite its negligible increase in leverage at the time, it has weakened the company's cushion in its credit metrics in a challenging operating environment,” S&P said in a press release.

The agency said it estimates TruGreen’s leverage will be near 6.5x on Dec. 31, but inflation, staffing difficulties and weaker demand could push leverage higher.

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