S&P: Aramark loan BB, notes B-

Standard & Poor's said it revised the outlook on Aramark Corp. to negative from stable.

The agency also said it affirmed the B+ corporate credit rating on the company and assigned a BB rating to its proposed amended and extended $500 million dollar-denominated revolving credit facility due 2015.

A 1 recovery rating was assigned, indicating 90% to 100% expected recovery in a default.

The company's remaining $165 million revolving credit facilities due 2013 will remain in place.

S&P also said it assigned a B+ corporate credit rating to Aramark Holdings Corp., the ultimate parent company of Aramark, along with a B- rating to its proposed $600 million senior unsecured payment-in-kind toggle notes due 2016, issued under Rule 144A without registration rights, and a 6 recovery rating, indicating 0 to 10% expected recovery.

The outlook is negative.

The proceeds will be used to fund a $711.7 million dividend to its private equity sponsors and existing management.

The outlook revision reflects a of a more aggressive financial policy than had previously been incorporated into the rating following the planned debt-financed dividend.

The ratings reflect its highly leveraged financial profile and considerable cash flow requirements needed to fund its interest and capital expenditures, the agency said.

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