S&P revises BrightHouse to stable

Standard & Poor's said it revised its outlook on BrightHouse Group Ltd. to stable from positive and affirmed the B- long-term corporate credit rating.

At the same time, the agency affirmed its B- issue rating on BrightHouse's £220 million senior secured notes. The recovery rating on these notes is 3, indicating an expectation of meaningful (50%-70%; lower half of the range) recovery prospects in the event of a payment default.

The outlook revision reflects S&P’s view that the risk of tightening regulations has increased and might put more pressure on the company's business model. Like all consumer-credit companies in the U.K., BrightHouse will need to apply for full permission authorization from the Financial Conduct Authority in the period from April 2015 to June 2015, in order to continue its operations.

If the company doesn't obtain full permission it will not be able to continue operations after April 2016, when its interim permission expires, S&P said.

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