Single, stable business line of independent financial advice Minimal balance sheet risk Sufficient liquidity Short track record since reorganization, with relatively high leverage Negative tangible equity Limited profitability and debt-service capacity The stable outlook reflects our expectation for Aretec Group Inc.'s earnings and debt-service capacity to be under pressure over the next 12 months, but for the company to maintain sufficient liquidity and a comfortable cushion relative to the springing leverage covenant on its revolving credit facility. We could downgrade Aretec if the company's covenant is activated, if we expect the first-lien leverage to weaken beyond our current expectations (so that the cushion to the leverage covenant deteriorates), if liquidity worsens, or if we observe meaningful attrition of advisors. An
