S&P lifts CPI Card recovery to 2

Standard & Poor's said it affirmed the BB- corporate credit rating on CPI Card Group Inc. and revised the recovery rating its $435 million senior secured term loan due 2022 and $40 million revolver bank loan due 2020 to 2 from 3.

The 2 recovery rating indicates 70% to 90% expected default recovery.

The agency also said it raised the rating on the loans to BB from BB- issued by CPI Acquisition Inc.

The outlook is stable.

The revised recovery rating reflects an expectation for CPI's improved recovery prospects under the agency’s simulated default scenario following the repayment of $115 million of the outstanding term loan, S&P said.

The ratings also consider the company's leading position in the growing U.S. credit, debit and prepaid financial payment card market, the agency said.

S&P said it expects that CPI's credit measures will strengthen significantly over the next 12- to 18-months due to industry tailwinds causing leverage to improve to less than 4x by the end of 2016.

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