S&P revises AmeriLife to negative

S&P said it affirmed the B long-term corporate credit rating AmeriLife Group LLC and revised the outlook to negative from stable.

The agency also affirmed the B+ issue-level rating on the company's first-lien secured revolver and term loan with a recovery ratings of 2, indicating an expectation for a substantial (70%) recovery of principal in the event of a payment default.

S&P also affirmed the CCC+ issue-level rating on the second-lien secured term loan with a recovery rating of 6, indicating an expectation for a negligible recovery (0%) in the event of a payment default.

"The outlook revision reflects our view that AmeriLife's covenant cushion under its first-lien credit agreement may tighten in 2017-2018 as the financial maintenance covenant (based on a total net leverage ratio) steps down by 25 basis points per quarter through the end of third-quarter 2018," S&P credit analyst James Sung said in a news release.

As of first-quarter 2017, AmeriLife had a total net leverage ratio of 6.27 times (as defined by the credit agreement), a 16% covenant cushion versus the maximum allowed ratio of 7.5 times. However, the agency said it expects this cushion to tighten to about 10% in 2017-2018 as the covenant steps down to 6.75 times by year-end 2017 and 6 times by year-end 2018.

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