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S&P downgrades GreenSky
S&P said it lowered its issuer credit rating on GreenSky Holdings LLC to B from B+. The outlook is stable.
At the same time, S&P downgraded the company's senior secured debt to B from B+. The recovery rating on the senior secured debt is 4, reflecting an expectation for average recovery (35%) in a default scenario.
“Our downgrade reflects GreenSky's lower profitability and higher leverage stemming from its funding diversification initiative in 2020. Our measure of adjusted debt to EBITDA was 9.60x at year-end 2020, and it includes the new asset-backed warehouse facility in debt. Excluding the warehouse facility, debt to EBITDA would be 4.99x, still elevated compared with 2.73x at year-end 2019,” S&P said in a news release.
“EBITDA interest coverage also declined, to 3.02x at year-end 2020 from 5.92x at year-end 2019.”
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