S&P cuts, rates Freedom Mortgage notes

S&P said it affirmed its long-term issuer credit rating on Freedom Mortgage Corp. at B-.

The outlook is stable.

At the same time, the agency lowered the rating on the company's existing senior unsecured notes to B- from B and revised the recovery rating to 3, reflecting an expectation for meaningful recovery (55%) in a default scenario, from 2.

S&P assigned a B- rating to the $500 million of new senior unsecured notes, with a 3 recovery rating.

The agency affirmed the B+ rating on the company's senior secured term loan. The recovery rating remains 1, reflecting an expectation for very high recovery in a default scenario.

S&P said the affirmation follows Freedom's announcement that it plans to raise $500 million of additional senior unsecured notes, which the agency believes could be upsized depending on market conditions.

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