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S&P expects stable outlook for Rural/Metro
Standard & Poor's said it has updated its Creditwatch listing on Rural/Metro Corp. and its subsidiary, Rural/Metro LLC, noting that the Oct. 20 Creditwatch listing was prompted by the plans of Rural/Metro Corp. to refinance its credit facility due 2011, including its revolver due 2010, and to launch a tender offer for its 9.875% senior subordinated notes due 2015.
The agency said that it is updating the Creditwatch listing to indicate that, that upon completion of the proposed refinancing, it expects the corporate credit rating to be upgraded to B+ from B and expects the outlook to be stable.
According to S&P, the refinancing will extend the maturity of the credit facility and give the company the ability to continue to use its free cash flow to prepay debt.
Additionally, a successful tender offer for the senior subordinated notes, would reduce the complexity of the capital structure by effectively eliminating the restricted payments basket provision of the Holdco debt that applied only to the senior subordinated notes, the agency said.
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