Standard & Poor's Rating Services said yesterday that it will no longer rate J.G. Wentworth, LLC's counterparty credit and senior secured debt at J.G. Wentworth's request. S&P's announcement occurred on March 31, 2009 after Wentworth announced Deutsche Bank had extended a "standstill" agreement (relateing to an unpaid margin call on J.G. Wentworth's warehouse credit line with Deutsche Bank which J.G. Wentworth uses to purchase structured settlements).but before J.G. Wentworth's March 31 deadline to pay $6 million of quarterly interest on separate corporate debt.
Standard & Poor's Announcement
"This rating action follows Wentworth?s announcement that it had
obtained an extension from Deutsche Bank of the waiver related to its
$16.9 million margin call. The extension of this ?standstill? agreement
allows Wentworth to fund its business until April 22 without further
margin calls. However, subsequent to the expiration of the waiver, the
warehouse lender could provide a notice of default, which we believe
could lead to a cross-default on Wentworth?s other debt, including the
senior secured bank loan. In addition, we believe Wentworth?s ability
to continue operating is limited without further financial assistance
from private equity owners JLL partners."
Patrick Hindert, structured settlement industry commentator and "poorly disguised friend" of J.G. Wentworth. citing "industry sources", said on his blog:
- Wentworth subsequently missed its March 31 midnight deadline to pay the $6 million of interest on its general corporate debt although a 30 day grace period apparently exists;
- By removing itself from the S&P ratings, J.G. Wentworth prevented a probable additional credit downgrade;
- Wentworth's $325 million of general corporate bonds are "almost worthless" and are trading, if at all, for pennies on the dollar.
- Although David Miller remains Chief Executive, Wentworth has hired an outside consultant for advice on debt restructuring.
- Structured
settlement asset-backed securities already issued by Wentworth are
legally separate from Wentworth and therefore not directly impacted by
Wentworth's corporate financial problems.
Have the Fat Opera Singing Vikings FINALLY been slayed? Will Mr.Wentworth soon be conducting Chopin's "Marche Funebre"?
