Alorica Inc. Downgraded To 'B' On Weaker-Than Anticipated-Performance; Outlook Negative

  • Irvine, Calif.-based customer service outsourcing provider Alorica Inc.'s revenues and margins have contracted meaningfully beyond our expectations, causing leverage to increase beyond the mid-4x area, where S&P expects it to remain through the rest of the year.
  • As a result, S&P has lowered the issuer credit rating on the company to 'B' from 'B+', with a negative outlook. The rating agency also lowered the senior secured issue-level ratings to 'B+' from 'BB-'. The recovery ratings remain unchanged.
  • The negative outlook reflects continued concerns surrounding limited covenant cushion as well as potential execution risk surrounding Alorica's restructuring initiatives and related weakening cash flow.
  • Alorica Inc operates in the business process outsourcing (BPO) space in Jamaica and is the main tenant of Stanley Motto’s 58 Half Way Tree property.

(Source: S&P)