S&P downgrades Gainwell

S&P said it lowered its ratings on Gainwell Holding Corp. to B- from B and its senior secured debt to B from B+. The 2 recovery rating indicates substantial (50%-70%; rounded estimate: 70%) recovery in default.

Veritas Capital–backed Gainwell’s performance in fiscal 2023 failed to meet S&P’s forecasts mostly due to higher-than-expected nonrecurring costs related to integration and separation and investments in the business and significantly higher interest expense.

“We now expect S&P Global Ratings-adjusted leverage of about 11x and about 8x in fiscal years 2023 and 2024, respectively, more than a turn of leverage higher than previously expected,” the agency said in a press release.

The outlook is stable.

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