S&P revises STG-Fairway view to stable

S&P said it affirmed the B issuer credit rating on STG-Fairway Holdings (First Advantage Corp.), the B+ issue-level rating on the company's senior secured first-lien debt and the CCC+ rating on the senior secured second-lien debt.

The recovery ratings on the first-lien and second-lien debt are unchanged, respectively, at 2 (70%-90% recovery in a default; rounded estimate: 70%) and 6 (0%-10% recovery in a default; rounded estimate: 0%).

The agency also revised the outlook to stable from negative.

“The outlook revision reflects our expectation that over the next 12 months, First Advantage could reduce leverage to the 6x area and generate $20 to $30 million in reported FOCF,” S&P said in a news release.

“We believe the company has made sustainable progress toward stabilizing revenues by resuming sales growth with its existing customer base, developing a good pipeline of new business prospects, and realizing costs savings.”

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