Moody’s lowers Lereta

Moody's Investors Service said it downgraded Lereta, LLC’s corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD and the instrument ratings on the $40 million senior secured first-lien revolving credit facility due 2026 and the $250 million senior secured first-lien term loan due 2028 to B3 from B2.

“The ratings downgrade reflects Moody's expectations for mortgage origination volumes to remain subdued over the next 12-18 months, leading to weaker revenue for Lereta than previously expected, high debt to EBITDA leverage and lower cash flow. The outlook for mortgage origination volumes declined over the past quarter and Moody's expects that interest rates will likely remain elevated at levels that are close to 5% through 2024.

“Revenue at Lereta is heavily dependent on mortgage origination volumes and as a result of anemic volumes over the past few quarters, leverage increased with debt to EBITDA over 8x. Moody's expects that debt-to-EBITDA leverage will remain above 7x over the next 12-18 months as revenue growth is limited,” the agency said in a press release.

The outlook remains stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.