Moody’s rates Frontdoor notes B2

Moody's Investors Service said it assigned a B2 rating to Frontdoor, Inc.'s (American Home Shield) proposed senior notes.

Frontdoor will be spun off to the shareholders of its current parent, ServiceMaster Global Holdings, Inc.

The net proceeds from the proposed financings and from an earlier announced $650 million senior secured term loan will be used to repay debt at ServiceMaster.

The agency said the Ba3 corporate family rating reflects Frontdoor's moderately high debt to EBITDA which is expected to remain around 4 times and solid free cash flow to debt anticipated to be at least 10%.

Moody's said it considers the market small and concentrated, and Frontdoor's service lines limited in scope and geographic scale.

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