Moody's: Oppenheimer view positive

Moody's Investors Service said it raised the outlook on Oppenheimer Holdings, Inc.'s B1 foreign-currency corporate family rating and the B1 $125 million seven-year bank facility of subsidiary E.A. Viner International Co. to positive from stable to recognize the improvements in Oppenheimer's operating performance over the last 12 months.

Oppenheimer has demonstrated a healthy level of growth in revenue and profitability as its retail brokerage and investment banking units benefited from the strength of the equity markets, the agency said. Although Oppenheimer's profitability continues to trail that of its larger competitors, Moody's noted the improvements in advisor productivity and retention levels.

Also contributing to the positive rating action was Oppenheimer's paydown of $25 million of its outstanding bank facility, including a $15 million voluntary payment. The agency said Oppenheimer's debt-to-EBITDA ratio is now quite strong at 1x.

Over the last several years, Oppenheimer's regulatory track record has included a number of problems that Moody's considered to be indicative of a sub-optimal control and compliance environment and procedures at the company. Although a few outstanding regulatory issues remain, the agency said Oppenheimer has recently made investments in staff and technology and implemented personnel and policy changes to tighten and improve its compliance and regulatory inquiry response procedures.

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