S&P: First American Payment on watch

S&P said it placed First American Payment Systems LP’s ratings on CreditWatch with negative implications.

“The CreditWatch placement reflects our expectation that First American Payment Systems will likely breach its first-lien net leverage ratio covenant, which steps down to 4.5x as of March 31, 2020, if it doesn't receive a waiver. Nonetheless, we forecast that the company's cash flow generation of approximately $30 million in 2020 will be sufficient to cover its debt service obligations of approximately $23 million. There is no longer any mandatory debt repayment remaining under the credit facilities,” said S&P in a press release.

The agency said it sees resolving the placement within 90 days or when the company is able to obtain an amendment or refinance its credit facilities.

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