Enova International Inc.

The stable outlook reflects our expectations that over the next 12 months Enova's leverage, as measured by debt to ATE, will remain between 3.0x-4.0x. Our outlook also considers Enova's existing receivables mix, growing tangible equity, and no imminent refinancing risk. We could lower the ratings over the next 12 months if Enova's credit performance significantly deteriorates or becomes subject to a material regulatory finding, such that it impedes operating performance. We could also lower the ratings if leverage approaches 4.5x. We could raise the rating over the next 12 months if leverage remains well below 2.75x, credit quality remains stable, and there are no material regulatory rules or findings that could impede operating performance. Enova International is an online-based lending

...We expect Enova's net charge-offs to remain above 25%. Enova mitigates this risk by pricing its loans at higher average annual percentage rates (APR) than its peers, enabling the company to have consistent net revenues and earnings. For the nine months ended Sept. 30, 2024, Enova's net charge-offs as a percentage of average gross receivables were around 29.6%, higher than its rated peers in the consumer finance sector. We expect Enova to fund its balance sheet growth primarily by accessing the secured markets. As of Sept. 30, 2024, Enova had about $3.3 billion of principal debt outstanding, comprised of 62% securitizations, 27% unsecured debt, and 11% drawn on its secured revolving line of credit. While the securitization markets can offer more attractive rates than unsecured debt, it is a less reliable funding source in times of economic duress and encumbers the balance sheet, in our view. We currently rate Enova's unsecured debt at a notch below the issuer credit rating at 'B-'. This...

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