S&P trims Stearns Holdings

S&P said it lowered its long-term issuer credit rating on Stearns Holdings LLC to B- from B. The outlook is negative.

At the same time, the agency lowered its issue rating on the company's senior secured notes to B- from B. The recovery rating on the company's senior secured loans is 4, indicating an expectation for average recovery (30%-50%, rounded estimate: 40%) in a simulated default scenario.

The rating actions follow Stearns' weakening operating performance over the last 18 months.

“Debt to tangible equity has risen above 2.0x, our previous threshold for a downgrade. At the end of second-quarter 2018, debt to tangible equity was 2.1x, compared with 1.6x a year ago,” S&P said in a news release.

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