S&P cuts ConvergEx

Standard & Poor's said it lowered its long-term counterparty credit rating on ConvergEx Group LLC to B from B+. The outlook is stable.

The agency said it also lowered its rating on ConvergeEx's first-lien senior secured credit facilities to B from B+ and lowered its rating on the company's second-lien secured credit facility to CCC+ from B-.

The recovery ratings on the first-lien and second-lien debt remain 4 and 6, respectively.

"Our rating action on ConvergEx is based on the company's weakened financial profile due to high debt leverage and subpar operating performance, including its weak interest coverage, declining overall earnings, less-than-adequate cushion against its covenants, the increasing level of costs and affected business lines in relation to the ongoing SEC and Department of Justice investigations, weak risk management, and negative tangible equity," said S&P credit analyst Sebnem Caglayan in a news release

"The company's low-risk, institutional trade execution business model and well-positioned investment technology business partly offset these weaknesses."

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