Moody's rates Arrow Global notes B2

Moody's Investors Service said it assigned a provisional B2 corporate family rating to Arrow Global Guernsey Holdings Ltd. and a B2 rating to the proposed £200 million long-term senior secured bond to be issued by the Arrow Global Finance plc.

The outlook is stable.

The corporate family rating is supported by Arrow's market share, improving profitability metrics, adequate risk management practices and stable operating cash flow, the agency said.

The ratings are constrained due to the firm's monoline business model, relatively modest level of capital, potential litigation risks arising from outsourcing its debt collection process and its relatively high pricing risk in terms of valuation of its debt portfolio, the agency noted.

Leverage will remain at a relatively modest level with debt-to-adjusted EBITDA below 3x.

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