S&P rates HomeServe loans BB-

S&P said it assigned its BB- issuer credit rating to HomeServe USA Holding Corp. and a BB- issue rating and 3 recovery rating to the proposed revolver and first-lien term loan. This indicates an expectation of meaningful recovery (50%-70%; rounded estimate: 50%) in the event of a payment default.

The outlook is stable.

HomeServe is recapitalizing. The proposed debt financing will consist of a $150 million revolving credit facility due 2028 and $1.05 billion first-lien term loan due 2030.

“The stable outlook reflects expectation for sustained top line growth (organically derived) with modest EBITDA margin expansion and no incremental debt issuance. We expect improved cash flow generation to bolster balance sheet liquidity and drive meaningful improvement in key credit metrics (through net debt reduction) through 2024,” S&P said in a news release.

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