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S&P downgrades BrightHouse
S&P said it lowered its long-term issuer credit rating on BrightHouse Group Ltd. to CCC from CCC+. The outlook is negative.
As a consequence, S&P also lowered its issue rating on BrightHouse's £220 million senior secured notes due 2018 to CCC from CCC+. The 4 recovery rating on the senior secured notes indicates an expectation of average recovery (30%-50%; rounded estimate: 35%) in the event of a default.
On April 6, BrightHouse announced that it had received notification that the FCA intends to provide the group with authorization to continue operating as a U.K. consumer credit firm. The authorization is subject to a number of conditions, one of which is the restructuring of BrightHouse's £220 million senior secured notes before the maturity date on May 15, 2018.
“The downgrade therefore stems from our opinion that BrightHouse's current capital structure is unsustainable when considered alongside its vulnerable business operations and weak credit metrics,” S&P said in a news release.
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