S&P gives Aramark notes BB

S&P said it assigned a BB issue-level rating to Aramark Services Inc.'s proposed $1.15 billion senior unsecured notes due 2028.

The recovery rating is 5, reflecting an expectation for modest (10%-30%; rounded estimate: 20%) recovery in the event of a payment default.

Proceeds will be used to fund the AmeriPride acquisition and pay down revolver borrowings.

All of the existing ratings on the company, including the BB+ corporate credit rating, BBB- senior secured debt ratings and BB senior unsecured note ratings, are unchanged by the transaction.

The outlook is negative.

“Our ratings on Aramark incorporate the company's leading (though not dominant) position in the competitive and fragmented food and support services market and its sizable business with customers in relatively stable service segments (particularly heath care, education, and corrections), which translates into consistent profitability,” S&P said in a news release.

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