S&P affirms IAP Worldwide

Standard & Poor's said it affirmed its B+ corporate credit rating on IAP Worldwide Services Inc.

At the same time, the agency said it affirmed its B+ bank loan rating and the 2 recovery rating on IAP's proposed $490 million first-lien credit facility and its B- bank loan rating and 5 recovery rating on IAP's proposed $120 million second-lien term loan.

The outlook is negative.

S&P said the ratings on IAP reflect the company's revenue concentration from a few large contracts and the less-predictable nature of its contingency support operations, which contribute most revenues and profits.

These weaknesses are partly mitigated by the low fixed-capital intensiveness of operations, S&P added, noting the rating also factors in the slight integration challenges the company will face following its March 2005 acquisition of Johnson Controls World Services Inc.

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