Enova International Inc.

The stable outlook reflects our expectations that over the next 12 months—-despite macroeconomic headwinds--Enova's leverage, as measured by debt to ATE, will remain between 2.75x-3.5x. Our outlook also considers Enova's transition to longer-duration loans and small business lending, its growing tangible equity, no imminent refinancing risk, and no new regulatory rules or findings. We could lower the ratings over the next 12 months if Enova's credit performance significantly deteriorates or it becomes subject to a material regulatory finding, such that it impedes operating performance. We could also lower the ratings if leverage approaches 4.5x. An upgrade is unlikely over the next 12 months. Over time, we could raise the rating if leverage remains well below 2.75x, credit quality remains stable,

...Enova's net charge-offs remain at the higher end of its peer set. For the nine months ended Sept. 30, 2023, Enova International's net charge-offs as a percentage of average gross receivables were around 30.5%, higher than its rated peers within the consumer finance sector. We expect that an economic slowdown along with an expected rise in unemployment next year, higher for longer rates, and inflation pressures will continue to impact the purchasing power of subprime consumers and pressure the asset quality. Enova's leverage, as measured by debt to adjusted total equity (ATE), remains within our expectations. As of Sept. 30, 2023, Enova's leverage was around 2.6x, marginally below our expected range of 2.75x-3.5x. We anticipate leverage will rise as the company continues to fund and grow its receivables and engages in share buybacks. Enova remains reliant on securitization financing that encumbers its balance sheet. As of Sept. 30, 2023, Enova had about $2.4 billion of principal debt outstanding,...

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