S&P revises Cardinal view to negative

S&P said it revised its outlook on Cardinal Holdings 3, LP, parent of Capco, and its finance subsidiary Cardinal US Holdings, Inc. to negative from stable.

At the same time, the agency affirmed the B long-term issuer credit ratings on both entities.

Additionally, S&P affirmed the B long-term issue ratings on Cardinal US Holdings' $250 million senior secured term loan and $65 million senior secured revolving credit facility. The 3 recovery rating remains, indicating an expectation of meaningful (50%-70%; rounded estimate 55%) recovery in the event of a payment default.

“The rating action reflects that we anticipate weaker credit metrics, in particular higher adjusted debt to EBITDA, weaker free cash flow, and weaker cash interest coverage ratio than we previously expected, due to higher-than-expected restructuring costs, and cash distributions made by Cardinal Holdings on its preferred shares,” the agency said in a news release.

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