S&P downgrades Home Capital

S&P said it lowered the long-term issuer credit ratings on Home Capital Group Inc. and Home Trust Co. to B- from B+ and BB, respectively.

The agency also said it affirmed the B short-term issuer credit ratings on both Home Capital and Home Trust.

The long-term rating on parent Home Capital is equalized with the rating on Home Trust because the parent company currently does not meet the requirements for a rating lower than B-, S&P said.

S&P also said it lowered the senior unsecured debt rating on Home Trust to B- from BB.

The agency also said it revised the CreditWatch implications on Home Capital and Home Trust to developing from negative, where it was placed in March.

The developing watch reflects the possibility of either a further downgrade on evidence of further deterioration in Home Capital's funding and liquidity profile, weaker-than-expected business performance or further management and leadership change, S&P said, or a potential upgrade on evidence of stabilization in the company's funding profile.

The downgrades follow a view that even since the last rating action on April 27, the agency said it believes further developments at Home Capital have continued to materially weaken its franchise position and erode its business and financial performance.

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