Altisource Portfolio Solutions S.A.

The negative outlook on Altisource reflects our view that over the next 12 months, the moratorium on foreclosures will continue to erode the company's liquidity, despite the end of the moratorium in July. We could lower the ratings over the next 12 months if: We believe Altisource's liquidity is not able to sustain another 12 months of operations, or The company executes exchange offers or debt restructuring on its senior secured term loan that we would view as distressed. An upgrade is unlikely over the next 12 months. Over the longer term, we could revise the outlook to stable if we believe Altisource could sustain EBITDA interest coverage above 1.5x while generating positive cash flow from operations. Real U.S. GDP

...Altisource Portfolio Solutions S.A. currently has negative cash flow due to its largely countercyclical business model, which is highly dependent on the level of mortgage foreclosures and delinquencies. With most of its revenue correlating with the level of mortgage foreclosures and delinquencies, Altisource Portfolio Solutions S.A. has been hurt by the moratorium on foreclosures from the CARES Act. While the moratorium will end in July, we expect the company's cash flow generation and EBITDA will continue to be depressed going into 2022. However, Altisource's operations could benefit from a rise in foreclosures after forbearance options are exhausted. We believe Altisource may be strained for liquidity to support operations over the next 12-18 months. The company ended first-quarter 2021 with $41.3 million of cash and cash equivalents, and we anticipate it will lose $5 million to $10 million of cash per quarter for the remainder of 2021. The new revolving line of credit established in...

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