Enova International Inc.

The stable outlook reflects S&P Global Ratings' view that Enova will maintain leverage between 3.5x and 4.5x debt to adjusted EBITDA and see top-line benefit from installment loan products over the next 12 months. We could lower the ratings if we expect debt to EBITDA to sustain above 5x. This scenario could result from weaker performance in installment loans or line-of-credit products, new regulation, or additional debt issuances. Over time, we could raise the ratings if the company maintains leverage below 3.5x while sustaining or growing EBITDA and lessening its revenue from short-term loans. We expect the U.S. economy to expand 2.2% this year and 1.7% in 2020, with an unemployment rate of 3.6% for 2019 and 2020. We anticipate

...Enova's revenue has grown quickly over the past four years, but margins have compressed because of the product mix and higher provisions. Enova has posted strong revenue growth, with declining exposure to short-term loans, which are subject to greater regulatory scrutiny. EBITDA margins have fallen because of the product mix and higher provisions on installment loans, but appear to be stabilizing. The regulatory environment is no longer a potential difficulty for the industry, but that could change under a new presidential administration or an increase in state oversight. Near-term regulatory risks have eased in the payday lending industry, because the Consumer Financial Protection Bureau's (CFPB) proposal to rescind the mandatory underwriting provisions and delay the compliance to November 2020. However, regulation changes passed in Ohio (House Bill 123) will result in loan product changes in the second quarter of 2019, and restrictions on certain lending products passed in Colorado (Proposition...

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