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S&P downgrades Performant
S&P said it lowered the corporate credit rating on Performant Financial Corp. to B- from B+.
The agency also said it lowered the ratings on Performant's secured debt to B from BB-.
The recovery rating on the debt remains at 2, indicating 70% to 90% expected default recovery.
The ratings remain on CreditWatch with negative implications.
The company’s recent loss of its sizable Department of Education student loan-default collection contract has increased the potential for continued high revenue volatility, S&P said.
This is driven by the company’s increased customer concentration and increased exposure to its Guaranty Agency business, the agency said.
The company is currently protesting the contract loss, but if the company is unable to secure the award, the Guaranty Agency segment will account for about 60% of total revenues with Great Lakes and Pennsylvania Higher Education Assistance Agency (PHEAA) being the company's principal agency that it serves, S&P said.
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