Moody’s downgrades SourceHOV

Moody's Investors Service said it downgraded SourceHOV, LLC's corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3-PD.

Moody's also said it downgraded SourceHOV's first-lien senior secured credit facility rating, which includes a $780 million term loan and $75 million revolving credit facility, to B3 from B2.

The agency also said it downgraded its $250 million second-lien senior secured term loan rating to Caa3 from Caa2.

The outlook remains negative.

The downgrades reflect an expectation that SourceHOV's financial risk profile will remain elevated over the next twelve months, characterized by a weak liquidity position and management's aggressive policies in managing sources of cash, Moody’s said.

SourceHOV's liquidity has meaningfully deteriorated following a strategic payment that was made for its TransCentra investment, the agency said.

While the TransCentra investment could provide long-term strategic benefits as it allows for cost-savings opportunities, Moody's said it expects that transaction will not meaningfully improve its liquidity position over the near term.

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