S&P cuts Resolute Investment

S&P said it lowered its ratings on Resolute Investment Managers Inc. and its first-lien term loan to B- from B and second-lien term loan to CCC from CCC+. The recovery rating on the first-lien secured debt remains 3, indicating meaningful (50%) recovery, and the recovery rating on the second-lien secured debt remains 6, indicating negligible (0%) recovery in default.

“Resolute's earnings declined in 2022, largely due to decreases in assets under management (AUM) and lower distribution revenue.As of Dec. 31, 2022, AUM was around $74 billion, down $15 billion (16%) from year-end 2021. The steep decline in Resolute's AUM, combined with lower ARK distribution fees, led the company's net revenue to fall about $61 million (26%) in 2022.

“As a result, we calculate Resolute's adjusted EBITDA to have declined to about $85.4 million, down $55.1 million (39%) from the prior year. Resolute's debt-to-adjusted EBITDA was 7.5x as of Dec. 31, 2022, well above our downside threshold of 7x. Given lower AUM at the start of 2023 and continued market volatility, we expect earnings growth to be muted this year and leverage to remain elevated over the next several years,” Moody’s said in a statement.

The outlook is negative.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.