S&P changes Loancore Capital view to negative

S&P said it revised its outlook on Loancore Capital Markets LLC to negative from stable. At the same time, the agency affirmed its B+ issuer credit rating.

“The fallout from Covid-19 has increased the risk that LCM experiences losses and receives margin calls on its securities and loan portfolio investments. The company depends on its secured repurchase facilities, which are backed by mortgage loans, participation interests, and CMBS, to finance the origination and purchase of CRE loans for securitization,” said S&P in a press release.

“The negative outlook reflects our view that, over the next 12 months, the current difficult operating environment may result in deterioration in prices or confidence in CRE markets that could lead to loan losses, margin calls on repurchase facilities, and stress on earnings,” S&P said.

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