Enova International Inc.

The stable outlook over the next 12 months reflects S&P Global Ratings' expectations that leverage, measured as debt to adjusted EBITDA, will be between 4.0x and 5.0x, with EBITDA coverage of 3.0x-4.0x, and tangible equity will grow. The outlook also considers no imminent refinancing risk and adequate liquidity during the pandemic. We could lower the ratings if we expect debt to EBITDA to remain above 5.0x, which could result from weaker performance in installment loans or line-of-credit products, new regulation, or additional debt issuances. An upgrade is not likely until after the pandemic and its resulting economic downturn subsides. Thereafter, we could raise the ratings if Enova maintains leverage below 3.5x while sustaining steady operating performance. An upgrade would also

...We expect the uncertainty in the U.S. economy caused by the COVID-19 pandemic to weaken operating performance. We expect the economic impact of the COVID-19 pandemic to result in reduced originations, increased fair-value adjustments for credit losses, and potentially higher charge-offs. Federal regulatory risk has temporarily faded, but state regulatory risk has increased. We have seen state regulators clamp down on high-cost consumer loans by passing bills that cap the maximum interest rate charged on consumer loans. In 2019, the Consumer Financial Protection Bureau (CFPB) issued a final rule to delay the compliance date for mandatory underwriting provisions for the 2017 rule to November 2020. Enova continues to transition away from single-pay products to installment-based lending. Enova has transitioned its receivables to longer-term products, specially installment loans, and line-of-credit accounts for small businesses. As of March 31, 2020, short-term loans accounted for 2% of gross...

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