Towergate warned on rating downgrade risk
Fitch Ratings has warned that Towergate Finance faces an issuer default rating (IDR) downgrade in the next two years unless the broker can deleverage further and increase its EBITDA.
The warning came as Fitch affirmed Towergate’s rating as B but changed the outlook from stable to negative.
The analyst report explained the revision to a negative outlook reflected Towergate's underperformance up to September 2011 “against the agency's expectations in terms of income and EBITDA (7% and 11% below respectively) and the subsequent lack of deleveraging, which reduces headroom at the 'B' rating level.”
In November last year, the broker reported a £35.4m loss for the nine months
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