Orange County Register

Standard & Poor’s Ratings Services said today that it lowered its credit rating on H&R Block Inc. to ‘BBB-/A-3′ from ‘BBB+/A-2,’ citing concerns about Block’s plan to sell its Irvine-based subprime subsidiary, Option One.

Here’s a clip from S&P’s release:

Given the turmoil in the mortgage markets, we believe that there is a high probability that Block’s deal to sell Option One to Cerberus may not occur as originally planned. Management has publicly stated that it is currently in talks with Cerberus to renegotiate this agreement. While these efforts may succeed, we believe that any renegotiated deal would occur on less-favorable terms than we had previously contemplated.

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