Moody’s rates 4Finance notes B3

Moody’s Investors Service said it assigned a backed B3 rating to the €100 million senior unsecured notes issued by 4Finance, SA, a funding vehicle belonging to 4Finance group.

The outlook is positive.

The B3 rating assigned to the securities reflects the B3 issuer rating of 4Finance Holding SA, the group’s holding company, Moody’s said.

The ratings also consider 4Finance’s role as the group’s funding vehicle and the unconditional and irrevocable guarantees from the largest operating companies in the 4Finance group, the agency added.

The guarantees constitute senior unsecured obligations by the guarantors and rank pari passu with all of the guarantors’ senior unsecured debt and senior to all of their subordinated debt, Moody’s said.

The ratings reflect the company’s strong financial performance, balanced against the regulatory risks embedded in its fast growing business model and the high credit risk in its lending portfolio, the agency said.

The group’s financial performance is primarily driven by the elevated pricing of its loans, which reflects the considerable credit risk it takes by doing business within the unsecured mass market retail segment, Moody’s said.

While its profitability is high, 4Finance Holding assumes significant credit risks, which can quickly translate into considerably weaker profitability under adverse economic conditions, the agency said.

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