S&P puts Och-Ziff on watch

S&P said it placed the BBB- issuer credit and issue ratings on Och-Ziff Capital Management Group LLC, OZ Management LP, OZ Advisors LP, OZ Advisors II LP and Och-Ziff Finance Co. LLC on CreditWatch with negative implications.

The CreditWatch placement considers the higher leverage the company will operate at as a result of the reassessment of its $400 million perpetual preferred issuance, S&P said.

The negative watch also considers risks the business is facing, which put projected leverage metrics at risk, the agency said.

As a result, S&P said it now expects debt-to-adjusted EBITDA to be about 2x compared to a previous expectation of closer to 1.5x.

Although the agency said it still assesses the company's financial risk profile as modest, this higher leverage, combined with ongoing pressures the business is facing, could pressure the company's ability to maintain or reduce its leverage consistent with the prior forecast.

To the extent Och-Ziff experiences an acceleration of outflows beyond what is already forecast and is unable to improve its investment performance, S&P said it may lower the ratings in the near term.

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