S&P raises Quicken Loans

S&P said it raised Quicken Loans LLC’s issuer credit and unsecured debt ratings on to BB+ from BB. The recovery rating on the debt is 3, reflecting an expectation of meaningful recovery (50%-70%, rounded estimate: 65% capped) in a simulated default scenario.

“We are raising our ratings on Quicken due to lower-than-expected leverage driven by record EBITDA and originations, as well as Quicken's ability to maintain secular trends in market share gains while diversifying their origination channels. Quicken reported a year-over-year increase of over 500% in adjusted EBITDA for 2020 through the third quarter, mainly as a result of substantial growth in production as homeowners refinanced their mortgages in record numbers,” S&P said in a press release.

The agency said it forecasts leverage as measured by net debt to EBITDA below 0.25x for 2020, well below its previous long-term expected range of 2x to 3x.

The outlook is stable.

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