S&P upgrades Cabot Financial

Standard & Poor’s said it raised the long-term counterparty credit rating on Cabot Financial Ltd. to B+ from B.

The outlook is stable.

The agency also said it affirmed the B+ rating on Cabot Financial (Luxembourg) SA’s senior secured term notes and revised down the recovery rating on the notes to 3 from 2. The 3 recovery rating indicates 50% to 70% expected default recovery.

The upgrade reflects Cabot’s increased earnings capacity and growth in total collections, which are expected to lead to an improvement in leverage and debt-servicing metrics in the second half of 2015 and in 2016, S&P said.

The agency also said it reflects an expectation that Cabot’s ratio of gross debt-to-adjusted EBITDA will remain at less than 5x.

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