Moody’s drops seven U.S. finance companies

Moody's Investors Service said it downgraded the ratings of seven U.S. finance companies due to the risk of a distressed exchange that the agency believes is presented by these companies' unsustainable capital structures and their upcoming debt maturities.

The corporate family and long term ratings of the following seven companies were downgraded by one to two notches, with a negative outlook:

• Creditcorp: Corporate family and senior secured ratings downgraded to Caa3 from Caa1; outlook revised to negative from stable;

• CNG Holdings, Inc.: Corporate family and senior secured ratings downgraded to Caa3 from Caa1; negative outlook;

• Curo Group Holdings Corp.: Corporate family rating downgraded to Caa3 from Caa1 and senior unsecured rating to Ca from Caa3; Curo Intermediate Holdings Corp.’s senior secured rating to Caa3 from Caa1; negative outlook;

• Community Choice Financial Inc.: Corporate family and senior secured ratings downgraded to Caa3 from Caa2; negative outlook;

• TMX Finance, LLC: Corporate family and senior secured ratings downgraded to Caa2 from Caa1; negative outlook;

• J.G. Wentworth Co.: Corporate family rating and senior secured rating of subsidiary Orchard Acquisition Co., LLC, downgraded to Caa3 from Caa1; negative outlook; and

• Prospect Holding Co., LLC: Corporate family and senior unsecured ratings downgraded to Caa3 from Caa1; outlook revised to negative from stable.

In a related action, the agency affirmed Enova International, Inc.'s Caa1 corporate family and senior unsecured ratings, with a stable outlook.

Moody’s said the downgrades reflect its increased concerns with respect to these companies' ability to refinance their upcoming debt maturities. Most of these companies have substantial debt maturities in the next two to three years.

Given an increase in distressed exchanges observed in Moody's rated universe of finance companies over the last 12 months, the agency said it sees a decline in financial flexibility broadly affecting the sector.

Those finance companies with weaker capital structures have an increased likelihood of not finding financing on attractive terms, if at all.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.