S&P rates Evertec, loan BB-

S&P said it assigned BB- ratings to Evertec Inc. and its upcoming $600 million term loan facility due 2030. The loan’s 3 recovery rating indicates meaningful (50%-70%; rounded estimate: 55%) recovery in default. The outlook is stable.

“Evertec has a small market position in the highly competitive merchant acquiring, payment services and technology services markets, in which scale matters and where it encounters substantially larger players. Its revenue base also has significant geographic and customer concentration. These factors constrain our rating assessment.

“However, factors that partially mitigate these constraints and support the rating include its leading position in Puerto Rico due to its relationship with Banco Popular, the ability to offer a broad range of transaction processing services from a single source, ownership of the ATH network (one of the leading personal identification number PIN debit networks in Latin America), its local presence, a high proportion of recurring revenue generated through long-term contracts, and the good levels of profitability it generates,” S&P said in a statement.

Evertec will use the loan to help buy Sinqia SA.

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