Moody's cuts Lender Processing liquidity

Moody's Investors Service said it lowered Lender Processing Services, Inc.'s speculative-grade liquidity rating to SGL-2 from SGL-1. Moody's affirmed the Ba1 corporate family and probability of default ratings and Baa3 senior secured ratings.

The outlook is negative.

The ratings reflect the change in the proposed capital structure, which has resulted in the use of $115 million of the new $400 million revolver, and uncertainty of profits and cash flow due to the sharp decline in mortgage originations and the prolonged industry moratoriums imposed by many of the leading banks, the agency said.

The recently completed refinancing leaves the company with a shortfall to repay the existing debt, which will be covered by drawing on the revolver, the agency added.

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