S&P gives Community Choice notes CCC

S&P said it assigned its CCC rating to Community Choice Financial Inc.’s $42 million first-lien senior secured notes due 2020, with a recovery rating of 1.

The recovery rating reflects an expectation of very high recovery (95%) in a hypothetical default scenario given the seniority of the issuance in the capital structure, the agency said.

The notes will be issued by Community Choice Financial Issuer LLC.

“We expect the issuance is a first step in the previously announced restructuring of CCFI's senior secured notes due 2019 and 2020,” S&P said in a news release.

“The issuing entity will lend the funds to CCFI, which will use the proceeds to pay down the existing revolving credit facility provided by Victory Park, effectively taking its place in the recovery waterfall, resulting in a debt neutral issuance on a consolidated basis.”

The CC issuer credit rating remains, reflecting the company's proposed restructuring of its capital structure to be completed late 2018, the agency said.

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