S&P upgrades ACE Cash Express

S&P said it raised the issuer credit rating on ACE Cash Express Inc. to B from B-.

The outlook is stable.

The agency also said it raised the rating on the company's senior secured notes due 2022 to B from B-.

The recovery rating on the notes is 3, indicating 55% expected default recovery.

ACE Cash Express has sustained a debt-to-EBITDA ratio of less than 3x and improved operating performance, S&P said.

The upgrades reflect the improved leverage metrics, steady operating performance and reduced regulatory risks, S&P said.

ACE's debt-to-adjusted EBITDA was 2.6x for the year that ended Dec. 31, 2018, down from 2.9x the year before as the company increased operating margins and repurchased 10% of its outstanding senior secured notes, the agency said.

S&P said it expects leverage will remain at less than 3x as the company continues its transition to more installment loans.

The stable outlook reflects an expectation that the company will continue to transition its loan products toward more installment lending without a significant adverse effect on its operating profitability, the agency said.

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