S&P downgrades RentPath

S&P said it lowered its issuer rating on RentPath LLC to B- from B. The outlook is negative.

At the same time, the agency lowered the issue-level rating on RentPath's secured first-lien credit facilities to B from B+. The recovery rating remains 2, indicating an expectation for substantial recovery (70%-90% recovery; rounded estimate: 75%) of principal in the event of a payment default.

S&P also lowered the issue-level rating on RentPath's secured second-lien term loan facility to CCC from CCC+. The recovery rating remains 6, indicating negligible recovery (0%-10% recovery; rounded estimate: 0%).

The downgrade and negative outlook reflect the company's growing debt leverage and lower free operating cash flow generation due to declining subscription revenues, property listings and average revenue per property and higher marketing spending primarily due to significant competitive pressure from CoStar Group Inc., the agency said.

For the 12 months ended June 30, the company's leverage increased to 7.9x from 6.6x at Dec 31, 2017, S&P added.

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