S&P cuts Altisource notes to B

S&P said it downgraded the rating on Altisource Portfolio Solutions SA’s senior secured notes to B from B+.

“We lowered our rating on the company's senior secured notes to B because of lower recovery expectations in our simulated default scenario. The higher-than-expected decline in EBITDA in 2019 led us to lower our estimate of the fixed-charge proxy, and the pause on debt amortization over the near term resulted in a higher debt figure in the simulated year of default,” S&P said in a press release.

The agency also revised the outlook to negative from stable and affirmed Altisource’s B issuer rating.

“We revised the outlook to negative because we expect the moratorium on foreclosures and the stay-at-home policies due to Covid-19 to weigh on Altisource's 2020 operating results. As a result, the company's leverage could rise and sustain above 4x, our previously cited threshold for a downgrade,” S&P said.

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