S&P cuts SAI Global Holdings

S&P said it lowered its long-term issuer credit rating on SAI Global Holdings I (Australia) Pty Ltd. to CCC from CCC+, the ratings on the company's first-lien debt to CCC from CCC+ and on the second-lien debt to CC from CCC-. The recovery rating on the first-lien debt is 3 and that on the second-lien debt is 6.

The outlook is negative.

“We lowered the ratings on SAI Global to reflect our view that tough trading conditions, particularly for the company's Knowledge and Mortgage Settlements business, will pressure the group's earnings, and ultimately, ability to meet its fixed obligations – increasing the likelihood of a liquidity event over the next 12 months,” S&P said in a news release.

“We view the company's capital structure as unsustainable with a high annual debt amortization and interest expense of about A$70 million amid a weak earnings outlook.”

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