S&P cuts CoreLogic

S&P said it lowered its ratings on CoreLogic Inc. to B- from B, its $3.75 billion first-lien term loan, $750 million senior secured notes and $500 million revolving credit facility to B- from B and the issue-level rating on Corelogic's $750 million second-lien term loan to CCC from CCC+. However, the 3 recovery rating on the company's secured facility and 6 recovery rating on its second-lien facility are unchanged.

“CoreLogic is exposed to the cyclicality in the mortgage market, and rising interest rates will likely cause revenue and EBITDA declines. About 60% of the company's revenue is tied to mortgage volumes. We expect mortgage loan originations for 2022 to drop sharply from 2021, primarily due to significant declines in refinancing activity as interest rates rise. The Mortgage Bankers Association currently projects a 40% year-over-year decline in total mortgage origination volumes,” S&P said in a press release.

However, the agency said it estimates CoreLogic will deliver positive free cash flow and maintain a good liquidity position. “Notwithstanding our forecast for very high leverage above 9x in 2022 and in the low-8x area in 2023, we believe the company has good liquidity for the B- rating, including significant cash balances and full availability under its $500 million revolver.”

The outlook is stable.

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