Fitch rates Cantor Fitzgerald notes BBB-

Fitch Ratings said it assigned an expected rating of BBB- to Cantor Fitzgerald, LP’s expected senior unsecured debt issuance.

The proceeds are expected to be used to repay Cantor’s $300 million of senior unsecured notes due June 26, Fitch said.

The expected rating is equalized with Cantor’s BBB- issuer default rating, reflecting that the debt is expected to represent a senior unsecured obligation of Cantor, ranking pari passu with existing senior unsecured debt, the agency said.

Given that proceeds are expected to be used to repay maturing debt, Fitch said it views the issuance as leverage neutral, and thus not a rating driver with respect to Cantor’s issuer default rating.

The agency noted, however, that in the first quarter of 2015, Cantor’s leverage increased as a result of temporary balance-sheet expansion and increased goodwill.

Although leverage remains within the company’s targeted range of 8.0 to 12.0x, the increased leverage does incrementally reduce Cantor’s financial flexibility and increases rating sensitivity, Fitch said.

The ratings also reflect the company’s established position in the middle-market brokerage space, moderate risk profile, controlled leverage and adequate liquidity levels, the agency said.

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