Fitch cuts DVI

Fitch Ratings downgraded DVI, Inc. including cutting its senior unsecured debt to D from C.

Fitch said the action follows DVI's announcement that is has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.

A single D rating reflects Fitch's belief that recovery potential for the rated securities is very low - below 50%. This view is based on the lack of any substantial unencumbered assets on DVI's balance sheet.

Further, a meaningful component of the value of assets pledged to secured lenders in excess of secured obligations consists of non-accruing, delinquent and repossessed assets, the rating agency said. Fitch also believes that DVI's historical delinquency and charge-off trends will weaken if the company or its principal lending officers are not able to continue servicing the receivables. Loss severity may be heightened depending upon the scope of the company's misrepresentations regarding its collateral.

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