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Moody's cuts J.G. Wentworth's rating

Moody's has downgraded the corporate family rating of J.G. Wentworth Co. and the senior secured rating of unit Orchard Acquisition Co. LLC to C from Caa3.

The downgrade came after J.G. Wentworth announced that it is filing for Chapter 11 bankruptcy to restructure its debt, which the rating agency said increases creditors' probability of loss and potential loss severity. The rating agency said the C senior secured rating reflects a loss expectation of more than 65%.

The rating agency has also revised the outlook to stable from negative, expecting that the filing will have a more limited impact on day-to-day operations as the action does not involve the company's operating units and other credit facilities.

Moody's expects to withdraw the ratings once the company files for Chapter 11 bankruptcy.