S&P cuts Amigo notes, shifts view negative

S&P said it lowered the rating on Amigo Loans Ltd.’s senior secured bond to B from B+, citing an increase in priority debt and the expectation of lower EBITDA growth, both of which affect the agency’s recovery analysis.

The agency also lowered the recovery rate to 5 from 4. The recovery rating of 5 indicates an expectation of average recovery (10%-30%; rounded estimate: 10%) in the event of payment default.

The agency affirmed Amigo’s B+ rating.

S&P also changed the outlook to negative from stable.

“The outlook revision follows Amigo’s recent announcement of revised growth prospects, including a sharp reduction in loan growth due to a shift away from repeat lending, an increase in impairments, and a further investment in the business,” S&P said in a press release.

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