S&P cuts TMX Finance, notes to B-

S&P said it lowered its issuer credit rating on TMX Finance LLC to B- from B.

The outlook is negative.

At the same time, the agency downgraded the issue ratings on TMX's 8½% senior notes due 2018 to B- from B. The recovery rating remains 4, reflecting an expectation for average recovery in the simulated default scenario, but the recovery expectations were revised downward to the low end of the 30%-50% range.

"The one-notch downgrade reflects ongoing weak financial performance as reflected by the company's steep decline in loan originations and EBITDA coupled with ongoing regulatory and heightened litigation risks," S&P credit analyst Gaurav Parikh said in a news release.

S&P expects leverage to remain between 4 times and 5 times and EBITDA coverage to remain above 2 times for the next 12 months.

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