JG Wentworth debt rating cut to CC, will they survive?

I'm not a big follower of factoring issues, despite the amount of coverage we provide here on the channel. By that I mean I don't check the news feed and hunt them down state to state but tend to concentrate on how they are doing in the big picture, or impacting my primary business in writing structured settlements.

However today's news that the big advertiser and heavy weight of the factoring industry, JG Wentworth has been further downgraded by S&P to CC from CCC+ is important news, as is the attached commentary to the rating.

There is real doubt in the mind of many analysts if Wentworth can continue much longer as a going concern with out substantial cash infusions from the JLLL partners, their private equity partner and owner or some further reworking of their deal with Deutsche Bank on outstanding loans.

I know there will be no tears shed in the primary market to see the biggest, and in some peoples opinion, most obnoxious advertiser out there removed from the scene. However, I am dubious as to the reports that Wentworth will go away any time soon or that the advertising tactics and marketing practices of the secondary industry will be any less of an issue for the structured settlement industry.

Come to your own conclusions, read the analysis and watch here for further news and updates.

Posted on March 18, 2009 .