Moody's rates iQor notes B2, loans B2, Caa2

Moody's Investors Service said it assigned B3 corporate family and probability-of-default ratings to iQor US Inc., a wholly owned subsidiary of iQor Holdings Inc.

The agency also assigned a B2 rating (LGD3, 34%) to the company's $200 million first-out senior secured term loan A and a Caa2 rating (LGD5, 83%) to the $75 million last-out term loan B.

The outlook is stable.

In October, iQor closed on a $275 million secured credit facility. The proceeds from the credit facility were used to fund iQor's acquisition of Receivables Management Services International Inc. and a recapitalization of its capital structure, according to the agency.

iQor's B3 corporate family rating reflects high leverage, industry pressures attributable to a difficult collection environment and credit contraction by consumers, significant customer concentration and integration risks related to the RMS acquisition, the agency said.

Ratings are supported by potential cost and efficiency benefits from the integration of RMS and the roll-out of internally developed technology platforms, balanced industry diversification of the customer base and potential upside if consumer spending and credit availability expand over the medium term, the agency noted.

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