Research Update: Genuine Financial Holdings LLC Downgraded To 'B-' On Expected Lower Background Screening Volume; Outlook Negative

Irvine, Calif.-based global background screening provider Genuine Financial Holdings LLC's (dba HireRight) screening volume is likely to sharply decline because of the coronavirus pandemic, based on our expectation that the monthly unemployment rate in the second quarter will easily reach 13% (likely in May), the highest at any time going back to 1948. We estimate S&P Global Ratings-adjusted gross leverage could increase above 10x in 2020 from the 7x area estimated on Dec. 31, 2019. We are lowering our issuer credit rating on HireRight to 'B-' from 'B'; the outlook is negative. The negative outlook reflects the potential for a lower rating over the next 6-12 months if sales and EBITDA decline significantly, or delayed receivable collections and bad debt

...- Irvine, Calif.-based global background screening provider Genuine Financial Holdings LLC's (dba HireRight) screening volume is likely to sharply decline because of the coronavirus pandemic, based on our expectation that the monthly unemployment rate in the second quarter will easily reach 13% (likely in May), the highest at any time going back to 1948. - We estimate S&P Global Ratings-adjusted gross leverage could increase above 10x in 2020 from the 7x area estimated on Dec. 31, 2019. - We are lowering our issuer credit rating on HireRight to 'B-' from 'B'; the outlook is negative. - The negative outlook reflects the potential for a lower rating over the next 6-12 months if sales and EBITDA decline significantly, or delayed receivable collections and bad debt expenses rise sharply without the expectation for a rebound....

Research Update