S&P: Securus Holdings Inc. 'B' Rating Outlook Revised To Stable From Negative; Ratings Affirmed
"The outlook revision to stable from negative reflects our view that Securus is in a better position to weather FCC regulation after renegotiating its customer contracts to raise call rates and lower commission payments made to facilities to offset the impact of lower ancillary fees," said S&P Global Ratings credit analyst Rose Askinazi.
In addition, a more limited portion of the company's call rates are above the new rate caps set by the FCC relative to October 2015. Therefore, we have increased confidence that leverage (4.8x annualized for June 30, 2016) will remain below our 6.5x downgrade threshold over the next two to three years.
The stable outlook reflects our expectation that Securus will be able to manage future FCC regulation, such that it will maintain leverage below 6.5x and continue to generate free operating cash flow with adequate liquidity.