S&P cuts Curo Group Holdings

S&P said it lowered its ratings for Curo Group Holdings Corp. to CCC- from CCC+, its 1.5-lien notes to CC from CCC and its junior notes to C from CCC-.

“We expect Curo could default on its interest payments in the next six months. As of Jan. 31, 2024, the company reported it had potentially breached its minimum liquidity covenant of $75 million. Curo had $84.6 million of unrestricted cash on the balance sheet as of Dec. 31, 2023.

“The company has to make $37.5 million of combined interest payments on its 1.5-lien notes and junior secured notes on a semiannual basis, and we think that even if Curo successfully amended the grace period for the 1.5-lien notes to 30 days, it could have insufficient liquidity within six months,” the agency said in a press release.

S&P added, “Curo's other debt facilities, including its funding debt and senior secured term loan, also have the $75 million minimum liquidity covenant. As a result, the company is also in potential breach of covenants for those debt facilities, which could result in events of default without waivers or amendments.”

The outlook is negative.

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