S&P Places Conn's (CONN) on Review for Downgrade

Standard & Poor's Ratings Services today placed all its ratings on Texas-based Conn's Inc. (Nasdaq: CONN), including its 'B' corporate credit rating, 'BB-' issue level rating on its $880 million ABL credit facility, and 'B-' on its $250 million senior unsecured notes, on CreditWatch with negative implications.

The CreditWatch placement reflects the company's weaker-than-expected performance during its third-quarter ended Oct. 31, 2014, driven by significant increase in delinquency levels and provision for bad balances as well as possible strategic or financial changes because of recent weak performance.

We would expect to resolve the CreditWatch placement when we gain better understanding of the company's strategies surrounding its underwriting practices. At that time, we would expect to gain more clarity on how the company's deteriorating quality of credit portfolio affects its liquidity position.

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