Moody's upgraded Evertec

Moody's Investors Service said it upgraded Evertec Group, LLC's corporate family rating to B1 from B2, the probability of default rating to B1-PD from B2-PD and the speculative-grade liquidity assessment to SGL-1 from SGL-2.

The agency also said it affirmed the company's senior secured debt instrument ratings at B1 and withdrew the ratings on the secured debt and unsecured debt instruments that have been repaid.

The outlook is stable.

These actions follow Evertec's parent company's initial public offering and subsequent refinancing of Evertec's 11% senior unsecured notes due 2018, Moody's said.

The proceeds of the IPO and new loans will be used to repay some high interest-rate debt, improving credit risk metrics noticeably, the agency said.

Given the recurring revenue base, which should lead to steady cash flow to further de-lever the company, Evertec's credit profile is now consistent with a B1 corporate family rating, said Terry Dennehy, a Moody's analyst.

The agency said it expects that Evertec will maintain lower financial leverage than similarly rated peers given that Evertec's results depend on Puerto Rico, which has experienced an extended period of poor economic activity and lacks significant growth drivers.

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