S&P lowers CoreLogic first-lien debt

S&P said it lowered the rating on CoreLogic Inc.'s first-lien debt consisting of a term loan and revolving credit facility, to BB+ from BBB-.

The downgrade reflects the revision of the recovery rating on the secured debt to 2 from 1 given the additional secured debt in the capital structure.

The 2 recovery rating indicates 70% to 90% expected default recovery.

All of the other ratings on CoreLogic, including the corporate credit rating, are unchanged.

CoreLogic will increase the amount of its first-lien term loan by $525 million to about $1.3 billion, as permitted in the incremental loan basket, with proceeds used to redeem the 7¼% unsecured notes and partly repay the revolving facility balance, S&P explained.

Total debt balance will increase moderately resulting in adjusted leverage in the mid- to high-3x range from about 3.3x as of the end of the quarter in March, the agency said.

The ratings reflect an expectation that the company’s leadership position in mortgage processing markets and its focus on cost containment will support consistent profitability, S&P said.

The ratings also consider the company's moderate financial institution client concentration and an expectation for continued subdued U.S. mortgage origination activity over the near term, the agency said.

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