Moody’s rates Servpro loan B2

Moody's Investors Service said it assigned a B3 corporate family rating, B3-PD probability of default rating and B2 first-lien facility ratings to Servpro Borrower, LLC.

Proceeds from a $315 million first-lien term loan, a $125 million second-lien term loan (unrated), and $876 million of new cash equity from Blackstone Group LP and rolled over equity from Servpro's management team will be used to back Blackstone's $1.3 billion acquisition of Servpro.

The first-lien facilities also include a $45 million revolver that is anticipated to be undrawn at closing.

The outlook is stable.

The agency said Servpro's rating acknowledges that Moody's adjusted debt-to-EBITDA will remain high, forecasted at about 6.5 times at year-end 2019.

It also reflects that the cost to service the proposed debt, including $35 million of interest expense and $3 million of mandatory term loan amortization, will constrain Servpro's free cash flow generation over the next 12 to 18 months.

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