S&P Global Ratings lowered its long-term issuer credit and issue ratings on Provident Funding Associates LP to CCC+ from B-, with a negative outlook.

Ratings believes that the rapid decline in market conditions due to the COVID-19 pandemic has offset the company's recent capital actions to improve net worth.

The rating agency also noted a "complete deterioration" of the company's tangible net worth covenant cushion on its origination warehouse facilities as of year-end 2019 after its mortgage servicing rights portfolio was marked down by $47.5 million in the fourth quarter of 2019.

The negative outlook takes into account the potential that Provident Funding Associates' operating performance could continue to fall amid the difficult economic and operating environment, according to Ratings.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.