Moody's has revised Stearns Holdings LLC's outlook to negative and affirmed the company's B2 corporate family rating and B2 senior secured rating.

Moody's said the change to a negative outlook reflects the lower level of tangible assets available to support the company's senior secured notes following its recently announced sale of virtually all of its mortgage servicing rights.

The outlook revision also reflects the low but not insignificant possibility that the company will use the proceeds from the sale to invest in assets less liquid than the mortgage servicing rights that were backing its senior secured notes, the agency said.

The affirmation reflects the company's modest profitability and solid capital, according to Moody's.