Moody's lowers Amigo Loans

Moody's Investors Service said it downgraded to B3 from B2 the corporate family rating of Amigo Loans Group Ltd. and the backed senior secured notes issued by Amigo Luxembourg SA. Moody’s also revised the outlook to negative from under review.

This rating action concludes the review for downgrade started on Feb. 11 and extended on May 28, the agency said.

“The downgrade follows a much weakened financial profile due to Amigo's challenged operations owing to the Financial Ombudsman Service's decision in favor of customers, resulting in sizeable provisioning requirements, and Amigo entering into an amended voluntary requirement with the Financial Conduct Authority (FCA), which have not concluded yet,” Moody’s said in a press release.

The outlook reflects uncertainties over added claim costs and potential regulatory fines Amigo may incur whose impact is amplified by the lack of clarity over when it will resume new lending to improve its weak profitability over the next 12-18 months, Moody’s said.

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