S&P downgrades Alorica

S&P said it downgraded Alorica Inc.’s ratings, citing weaker-than-expected performance for the first half of the year and higher leverage.

The agency cut the company’s issuer credit rating to B from B+ and the senior secured issue-level ratings to B+ from BB-. Recovery ratings are unchanged.

“The downgrade reflects weaker-than-anticipated operational performance in the first half of 2019, which caused earnings to contract and adjusted leverage to surpass 5x at the end of the second quarter,” said S&P in a news release.

The outlook is negative.

“The negative outlook reflects continued concerns around covenant headroom as well as potential execution risk around Alorica's restructuring initiatives and related weakening cash flow generation,” the agency said.

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