S&P revises STG-Fairway to negative

S&P said it revised its outlook on STG-Fairway Holdings LLC to negative from stable.

The agency also affirmed all of our ratings on STG-Fairway, including the B corporate credit rating, B+ first-lien credit facility rating (consisting of a $485 million term loan due 2022 with $400 million currently outstanding and $50 million revolving credit facility due 2020), and CCC+ rating on the company's $150 million second lien term loan due 2023. The recovery rating on the first-lien facility remains 2, indicating an expectation for substantial (70%-90%; rounded estimate: 70%) recovery in the event of a payment default. The recovery rating on the second-lien term loan remains 6, indicating an expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default.

"The outlook revision reflects our belief that STG-Fairway faces tough competition and that further client attrition would hamstring the company's effort to stabilize revenue," S&P analyst Suyun Qu said in a news release.

"This could result in STG-Fairway's credit metrics weakening beyond our forecast, and create the potential for a liquidity squeeze."

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