by Structured Settlement Watchdog®
On June 3, 2016, Standard & Poors downgraded J.G. Wentworth to 'CCC+' based on weakening credit metrics; outlook is negative reflecting the risk of weaker capital
markets access or asset sales to boost liquidity, while trying to stabilize the structured settlements segment and grow the mortgage segment in what we believe is a highly competitive market over the next 12 months. According to Standard & Poors, an obligor rated 'CCC' is currently vulnerable, and is dependent upon favorable business, financial, and economic conditions to meet its financial commitments.
JG Wentworth recently amended and restated its $300 million warehouse credit agreement extending the maturity and the revolving period by 12 months to July 2017. In connection with its focus on overall production requirements and segment profitability, the Company also elected to reduce its total warehouse capacity for structured settlement and annuity payment purchasing to $400 million and terminated its warehouse credit agreement with Credit Suisse, which it had previously reduced to $100 million. The Company will continue to evaluate the appropriate warehouse capacity levels for its structured settlement and annuity payment purchasing business on an ongoing basis and will aim to keep them at the most efficient levels.
JG Wentworth revealed that it received notice from the New York Stock Exchange on May 31, 2016 that it was not in compliance with the NYSE's requirement that the average closing price of its common stock be at least $1.00 per share over a consecutive 30-trading-day period. JG Wentworth is exploring alternatives for curing this deficiency. JG Wentworth's common stock will continue to be listed and traded on the NYSE during the cure period, subject to compliance with the NYSE's other applicable continued listing standards. The notice of non-compliance from the NYSE does not conflict with or violate any of the Company's credit or debt obligations.
JG Wentworth has been the dominant player in the structured settlement payment purchasing industry for over 15 years. In addition to JG Wentworth's financial troubles, the settlement purchasing industry is reeling from an endless supply of bad news, due to revelations of industry wide corrupt business practices, false advertising, price gouging, forged structured settlement transfer documents in two states and other deplorable business conduct that are harmful to American consumers and have led to a number of lawsuits.