24th Apr 2019 18:28
LONDON (Alliance News) - Moody's Investors Service on Wednesday assigned International Personal Finance PLC with a first-time Ba3 corporate family rating along with a stable outlook.
In addition, the credit agency also assigned a local and foreign currency provisional Ba3 rating to the nonprime lender's EUR1.00 billion medium term note programme.
Moody's said the rating reflects the lender's good loss-absorption capacity through high profitability, with an average underlying return on assets of 5.3% from 2016 to 2018.
Moody's said it expects International Personal Finance's profit to remain strong, but remains mindful of regulatory changes that could hurt earnings, including the tightening of the Polish total cost of credit cap.
The credit agency also noted the lender's strong capital position, with its 28.2% tangible common equity to tangible assets ratio at the end of 2018.
International Personal Finance's policy of funding each loan with 40% equity has been a key capital driver during the past decade.
Finally, Moody's was encouraged by the lender's reverse maturity transformation, which support its credit profile and allows the company to collect cash quickly and deleverage even if high yield markets are closed or regulatory changes forces it out.
The credit agency's Stable outlook reflects the expectations that International Personal Finance will continue to perform in line with its rating over the next 12 to 18 months despite pressure on profitability from regulatory changes.
Shares in International Personal Finance closed 2.5% lower at 194.60 pence on Wednesday.
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