Moody’s lowers RGIS Services

Moody’s Investors Service said it downgraded the ratings of RGIS Services, LLC, including the company’s corporate family rating to Caa1 from B3, probability of default rating to Caa2-PD from Caa1-PD and senior secured credit facilities rating to Caa1 from B3.

The downgrades include the company’s $60 million senior secured revolver due 2017 to Caa1 (LGD 3) from B3 (LGD 3); $6 million senior secured term loan B due 2016 to Caa1 (LGD 3) from B3 (LGD 3) and $525 million senior secured term loan C due 2017 to Caa1 (LGD 3) from B3 (LGD 3).

The outlook is negative.

The downgrades reflect the decreased probability that RGIS will be able to refinance its 2017 maturities without principal impairment or in a manner not deemed a distressed exchange, Moody’s said.

Following the acceleration of EBITDA declines in the third quarter of 2015, the likelihood of near-term performance improvement has diminished, the agency said.

During the quarter, the negative trends in contract price, wages, customer-mix and retailer inventories more than offset productivity improvements that the company implemented, Moody’s said.

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