Moody's snips Altisource

Moody's Investors Service said it downgraded Altisource Sarl's corporate family rating and its long-term senior secured bank credit facility rating to Caa2 from Caa1. Altisource's outlook was changed to stable from negative.

“The downgrade of Altisource's ratings reflects Moody's view that there is elevated refinancing risk for the company as its profitability will remain under pressure over the next year due to challenging operating conditions,” the agency said in a press release.

However, Moody’s noted Altisource’s revenue in the first quarter of 2022 increased. “However, the pace of this growth remains uncertain, particularly in light of the expected significant decline in residential mortgage origination volumes which will put pressure on the revenue the company generates from services it provides to mortgage originators, which the company hopes to offset through increased demand for certain origination solutions offered by Altisource.”

The stable outlook considers the challenging operating conditions for the company's default-related business are beginning to subside, but will continue to pressure the company's revenues and profitability and slow its diversification efforts away from PHH Mortgage Corp., over the next 12-18 months, Moody’s said.

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