ServiceMaster's Bond Deal Postponed

 New York, NY, July 5, 2007--ServiceMaster has postponed a $1.15 billion high-yield debt offering. However, the company is continuing to market a $2.85 billion leveraged buyout loan after being forced to increase the interest rate on the loan twice last week, according to people familiar with the matter.

ServiceMaster is one of a growing list of highly leveraged so-called covenant-light deals, which lack strong safeguards for investors, that has been forced to improve terms as investors began to reassess credit risk.

Creditors are also resisting payment-in-kind notes that allow companies to defer interest payments in favor of issuing more debt.

ServiceMaster was expected to raise the financing to back its LBO by a Clayton, Dubilier & Rice-led consortium of investors.

Investors have balked at buying debt that skirted typical investor safeguards in the past week. That's a sharp change from the recent past when demand was high for assets that were priced at historically low premiums over safe-haven U.S. Treasury securities.