Moody's gives Service Corp. notes B1

Moody's Investors Service said it assigned a B1 rating to Service Corp. International Inc.'s proposed senior unsecured notes due 2024.

Proceeds, along with balance sheet cash and revolving credit borrowings, will be used to repay Service Corp.'s senior unsecured notes due 2015 and 2019, Stewart Enterprises, Inc.'s senior unsecured notes due 2019 and pay related call premiums, transaction fees and expenses.

Ratings on the repaid notes will be withdrawn upon completion of the refinancing.

"The new 2024 notes will eliminate near-term bond maturities and lower annual interest expense by about $6 million per year at the cost of a slight increase in financial leverage and somewhat less liquidity as cash and revolver borrowings are also being used to complete the refinancing," Moody's senior analyst Edmond DeForest said in a news release.

The B1 rating on the proposed notes due 2024 reflects Service Corp.'s Ba3-PD probability of default rating and the notes junior position to the senior unsecured (guaranteed) revolving credit facility due 2018 and amortizing term loan B due 2018, the agency said.

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