Moody's affirms US Investigations

Moody's Investors Service said it affirmed the ratings of US Investigations Services, Inc. and stable outlook.

Despite challenges relating to cyclical pressures on the commercial side, the stable outlook recognizes technological and operational improvements which have positively impacted margins and helped reduce financial leverage over the last several quarters, as well as prospective technological benefits from the HireRight acquisition, Moody's said.

The company's ratings continue to be constrained by high financial leverage and the negative near-term effect of the employment outlook on the company's commercial employment screening businesses, the agency noted.

The preponderance of government revenues presents risks from a diversification standpoint and, despite accelerated revenue growth in recent quarters to reduce backlogs, limits revenue growth opportunities, the agency added.

Affected ratings include the company's B3 corporate family rating; B3 probability of default rating; B1 (LGD3, 31%) rating on the $90 million senior secured first-lien revolver due 2013; B1 (LGD3, 31%) rating on the $827 million senior secured first-lien term loans due 2015, including the new $110 million term loan C under the existing loan agreement used to finance the HireRight acquisition); the Caa2 (LGD5, 81%) rating on $290 million senior unsecured notes due 2015; and the Caa2 (LGD6, 94%) rating on $150 million senior subordinated notes due 2016.

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