S&P downgrades Oppenheimer

Standard & Poor's said it lowered the rating on Oppenheimer Holdings Inc.'s senior secured notes to B from B+.

The outlook is stable.

The ratings are based on the company's weak financial profile as a result of its low profitability, low interest coverage and high debt leverage metrics, S&P said.

Recent events have caused the company to use significant amounts of liquidity, which is a negative rating factor, the agency said.

Due to regulatory and legal settlements, the company is required to buy back considerable amounts of auction-rate securities from its clients, S&P said.

The company also needs to strengthen its regulatory/litigation risk management, the agency said, but its adequate capital base and diverse revenue stream partially offset these limitations.

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