OREANDA-NEWS. Fitch Ratings has today assigned an expected rating of 'BBB-(EXP)' to Cantor Fitzgerald, L.P.'s (Cantor) expected senior unsecured debt issuance. Proceeds of the debt issuance are expected to be used to repay Cantor's \$300 million of senior unsecured notes maturing June 26, 2015.

KEY RATING DRIVERS

SENIOR DEBT

The expected rating is equalized with Cantor's 'BBB-' Issuer Default Rating (IDR), reflecting that the debt is expected to represent a senior unsecured obligation of Cantor, ranking pari passu with existing senior unsecured debt. Given that proceeds are expected to be used to repay maturing debt, Fitch views the issuance as leverage neutral, and thus not a rating driver with respect to Cantor's IDR.

Fitch would note, however, that in 1Q15 Cantor's leverage (assets minus reverse repurchase agreements divided by tangible equity) increased as a result of temporary balance sheet expansion and increased goodwill and intangibles associated with BGC Partners Inc.'s (BGC) acquisition of GFI Group Inc., which is consolidated on Cantor's balance sheet. Although leverage remains within the company's targeted range of 8.0 -12.0x, the increased leverage does incrementally reduce Cantor's financial flexibility and increases rating sensitivity.

Cantor's ratings reflect its established position in the middle-market brokerage space, moderate risk profile, controlled leverage, and adequate liquidity levels. Ratings are constrained by the cyclicality of and dependence on capital markets activity for most of Cantor's businesses, and its exposure to non-core ventures, which could potentially introduce financial/reputational risk.

RATING SENSITIVITIES

SENIOR DEBT
The expected senior unsecured debt rating is equalized with Cantor's IDR and therefore would be expected to move in tandem with any changes to Cantor's IDR.

Cantor's IDR could come under pressure as a result of deteriorating operating performance in its core institutional brokerage, a material increase in leverage levels beyond articulated ranges, an adverse change in the reverse repurchase book composition, material loss or reputational damage from Cantor's non-core ventures and/or key man risk associated with Cantor's CEO.

Cantor's ratings also remain sensitive to changes in BGC's ratings. Fitch considers BGC to be a core subsidiary of Cantor due to the significant operational and financial linkages between the two companies.

Positive rating momentum, although limited in the near term, could be driven by sustained improvement in core institutional brokerage business margins, increased parent company liquidity levels, sale or closure of some non-core and non-viable ventures, while addressing key man risk and maintaining moderate risk appetite, low leverage, and sufficient capital.