S&P ups Terminix

S&P said it raised its ratings on Terminix Global Holdings Inc.'s outstanding senior unsecured notes (consisting of $186 million in 2027 outstanding notes and $49 million outstanding in 2038 notes originally issued by The ServiceMaster Co. LLC) to B+ from B.

The upgrade follows Terminix’s Nov. 16 announcement it used a portion of the proceeds from the sale of its ServiceMaster Brands franchise business to retire all $750 million of its senior unsecured notes due 2024. As a result, the agency withdrew the 2024 notes’ rating.

“At the same time, we revised our recovery rating on the outstanding senior unsecured notes to 5 from 6, reflecting our expectation for modest (10%-30%; rounded estimate: 20%) recovery in the event of a payment default. The revision reflects the much lower amount of unsecured debt in the capital structure, which leaves more value available to the remaining unsecured claims,” S&P said in a press release.

The agency also affirmed its BB+ rating on the company's first-lien debt, which consists of a $400 million undrawn revolving credit facility maturing 2024 and a $546 million outstanding first-lien term loan maturing 2026. The 1 recovery rating (rounded recovery estimate: 95%) is unchanged.

Terminix’s BB- issuer credit rating and stable outlook on Terminix are unchanged, S&P said.

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