In a rare event, The ServiceMaster Co. on Thursday returned to the high-yield market after voiding a $1 billion deal that priced a week ago before settlement.
The company, which provides services such as pest control, lawn care and cleaning to residential and commercial clients, announced in a regulatory filing that it was lowering its 2012 revenue and EBITDA forecasts, because one of its three business lines, TruGreen, is expected to show continued weakness in the second half of 2012.
TruGreen reported $1.1 billion in revenue to claim the top spot on the 2012 Lawn & Landscape Top 100 List.
As a result, bankers and the company decided to cancel its 6.125% notes due 2020, which priced last Wednesday at par. Those notes, which were upsized significantly from $300 million to $1 billion, failed to perform in the aftermarket, trading down as much as two points initially before moving to around 99 earlier this week.
Memphis, Tenn-based ServiceMaster and lead underwriters JP Morgan, Credit Suisse, Morgan Stanley, Barclays, Deutsche Bank, Goldman Sachs, Citi and Natixis, decided to void the original deal to deter any disputes with bondholders based on the newly disclosed information.
"It's easier to go back to retract the bond than deal with lawsuits," said one investor.
Read the full story here.
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