Moody's lowers LD Holding

Moody's Investors Service said it downgraded to B2 from B1 LD Holdings Group, LLC's (loanDepot) corporate family rating and downgraded to B3 from B2 its backed senior unsecured bond rating. LoanDepot's outlook was changed to negative from stable.

“The downgrade of loanDepot's CFR reflects the company's weak first quarter profitability along with its expectation that it will only return to profitability toward the end of the year at the earliest. The company reported a significant decline in profitability as measured by net income to average managed assets, with a net loss of -3.3% for the first quarter of 2022 driven by lower origination volumes and lower gain on sale margins,” Moody’s said in a press release.

The negative outlook reflects an expectation the company's profitability will remain very constrained over the next 12-18 months, leading to a modest erosion in its capitalization.

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