S&P downgrades Sophia, loan, notes

S&P said it lowered its corporate credit rating on Sophia LP to B- from B.

The outlook is stable.

At the same time, the agency downgraded its issue-level rating on Sophia's senior secured term loan to B- from B. The recovery rating remains unchanged at 3, indicating an expectation for meaningful (50%-70%, upper half of the range) recovery in the event of a default.

S&P also lowered its issue-level rating on the company's unsecured notes to CCC from CCC+. The recovery rating remains unchanged at 6, indicating an expectation for negligible (0%-10%) recovery in the event of a payment default.

"The rating action reflects our view of the company's weakened credit metrics, with current adjusted leverage in the mid-9x area as a result of typical cash flow seasonality, compared with adjusted leverage in the high 8x area at the time of the private equity ownership change in 2015," S&P credit analyst Minesh Shilotri said in a news release.

"The rating action also reflects our expectation that leverage will stay above 8x for the next 12 months."

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