Promised deleverage was held up by lower investment returns

Moody’s has downgraded Towergate’s outlook from stable to negative, but reaffirmed the B2 corporate family rating it was awarded last year.

The rating agency pointed to Towergate’s “continued strong market position” and “excellent profitability”, but said industry-wide issues had affected its outlook, as well as other brokers’.

Commenting on the outlook change, Moody’s lead analyst for Towergate, David Masters, noted that the consolidator’s ability to deleverage, which was expected at the time of its previous rating upgrade last year, has been hampered by ongoing problems in the wider economy and lower investment returns.

Towergate chief executive Andy Homer said: “We are delighted to have had Towergate’s B2 rating affirmed by Moody’s. The fact that they are taking a negative view of the sector is understandable given current low investment income returns.”

Towergate was upgraded to a B2 in July 2009 following the integration of Paymentshield into the group.