S&P cuts FinThrive

S&P said it lowered its ratings for FinThrive Software Intermediate Holdings Inc. to SD, selected default, from CCC+ and its $460 million second-lien term loan to D from CCC-. The agency affirmed the CCC+ issue-level rating on the other obligations and placed them on CreditWatch, with negative implications.

“The downgrade reflects FinThrive's latest subpar debt repurchases. This second repurchase of its $460 million second-lien term loan due in December 2029, of roughly $7 million at about 60 cents on the dollar is consistent with the company's previous public indication that it planned to continue subpar repurchases,” S&P said in a press release.

During the second quarter of 2023, FinThrive bought back $39 million of the second-lien loan. “We view this latest repurchase as a distressed transaction because lenders received materially less value than originally promised (approximately 60-70 cents on the dollar),” the agency added.

S&P said it aims to to reevaluate the issuer credit rating on the company, the issue-level ratings on the affected debt and other issue-level ratings over the coming days and plans to return the rating to CCC, based on its expectation that FinThrive could do more below-par value buybacks, which it could consider a selective default.

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