S&P downgrades SourceHOV, loans

S&P said it lowered its corporate credit rating on SourceHOV LLC to CCC+ from B-.

The outlook is negative.

Concurrently, the agency downgraded its issue-level rating on the company's $780 million first-lien senior secured term loan and $75 million revolving credit facility due 2019 to CCC+ from B-. The recovery rating is unchanged at 3, indicating an expectation for meaningful (50% to 70%; upper half of the range) recovery in the event of a payment default.

In addition, S&P lowered its issue-level rating on the company's $250 million second-lien term loan due 2020 to CCC- from CCC. The recovery rating is unchanged at 6, indicating an expectation for negligible (0% to 10%) recovery in the event of payment default.

"The rating action reflects SourceHOV's weaker-than-expected operating performance in 2016, which has resulted in continued weak liquidity and under 1% covenant cushion at the end of the second quarter 2016," S&P credit analyst Minesh Shilotri said in a news release.

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