Moody's affirms ACE Cash; outlook negative

Moody's Investors Service said it affirmed the ratings of ACE Cash Express (corporate family rating and senior secured credit facility B3, senior unsecured debt Caa1), but changed the outlook to negative from stable.

Moody's said its ratings for ACE reflect the company's strong market share in a highly fragmented industry, historically strong operating cash flow, experienced management team, diversified product and geographic mix, and generally attractive industry fundamentals given demand for financial services among "unbanked" and "underbanked" consumers.

On the other hand, the ratings also reflect the company's substantial leverage and substantially increased debt service burden, negative tangible net worth, the inherently high credit risk profile of the company's customer base, and exposure to potential payday lending litigation and legislation.

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