S&P Lowers Rating on ServiceMaster

New York, NY, June 8, 2007--Credit ratings agency Standard & Poor's Ratings Services said Thursday it lowered it ratings for The ServiceMaster Co., which provides landscaping, pest control and other services.

S&P lowered its corporate-credit rating to "B" from "BB+." "BB+" is the highest below-investment, or "junk-bond" grade, while "B" is four notches below that. A plus or minus indicates a rating's position in a category.

S&P also lowered its rating on ServiceMaster's existing senior unsecured debt to six notches to "CCC+" from "BB+."

S&P assigned a "B+" loan and recovery ratings to ServiceMaster's proposed $3.35 billion senior secured credit facilities.

"We expect operating performance to gradually improve over the next few years through continued improvement in retention rates, productivity savings from functional support areas resulting from completing the company's restructuring project, and cost savings from consolidating its Memphis headquarters," said Standard & Poor's credit analyst Jean Stout in a statement. "Nevertheless, leverage is very high following the buyout."

In March, lawn care and pest control provider ServiceMaster Co. agreed Monday to be bought by an investment group in a cash deal valued at $4.5 billion.