S&P affirms Volume Services America ratings

Standard & Poor's said it affirmed its ratings on Volume Services America Holdings Inc., including the B+ corporate credit rating and B- subordinated debt rating.

The outlook is stable.

S&P said the rating actions reflect the company's improved financial profile that addressed Volume Services America's near-term refinancing risk following the recently completed initial public offering of income deposit securities (representing dividend paying shares in Volume Services America Holding's common stock and subordinated debt).

Net proceeds of the transaction, together with $70 million of borrowings under Volume Services America's new unrated credit facility and cash on hand, were used to repay Volume Services America's existing bank loan and to tender most of its outstanding subordinated debt.

S&P said the ratings reflect Volume Services America Holding's overall weak financial profile, as well as the seasonality and event-driven nature of its business. These factors are somewhat mitigated by the firm's position as one of the leading niche players in the fragmented recreational food service industry and the contract nature of the business.

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