Moody’s lowers J.G. Wentworth view to negative

Moody’s Investors Service said it affirmed the Caa1 corporate family rating of J.G. Wentworth Co.’s and senior secured rating of its subsidiary, Orchard Acquisition Co., LLC.

The agency also said it revised the outlooks to negative from stable.

The outlook revision reflects the company’s weak financial performance due to competitive pressures in its core structured-settlements business, which presents long-term challenges, Moody’s said.

The company has significant debt-servicing requirements due to high interest expense stemming from large amounts of indebtedness, though it does not have substantial debt maturities in the next two years, the agency said.

The agency said it estimates the company’s leverage, excluding debt obligations of the securitization and permanent-financing trusts, is about 9x. Including the securitization debt, the company’s leverage would exceed 40x, Moody’s said.

The ratings could be downgraded if the company’s long-term cash flow generation is significantly reduced and its ability to service its corporate debt is substantially diminished, the agency said.

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