Intrum AB (publ)

The negative outlook indicates that as the COVID-19 outbreak continues across Europe, and in particular in Intrum's core markets, the company's gross collections and overall profitability will be tested, and the value of the acquired distressed debt portfolios could deteriorate. The search for high shareholder returns has been delaying the deleveraging process, and could continue to weigh on our assessment of Intrum's financial risk profile. We could lower the rating over the next 12 months if we saw significant delays and volatility in collection or material impairments leading to a deterioration in profitability and liquidity. Specifically, we would lower the rating if operational underperformance led to a deterioration in financial metrics. This could happen if the coverage of interest by

...We expect Intrum's leverage to remain elevated. S&P Global Ratings anticipates that Intrum's leverage will remain at above 5.0x over the next 12 months. This is somewhat balanced by solid interest coverage metrics, and limited debt maturities over at least the next 24 months, which provides some financial and operational flexibility. We believe the company will generally remain committed to deleveraging, and will benefit from the economic rebound that we expect for 2021. However, increasing availability of nonperforming loans (NPL) portfolios in the market at attractive rates could lead to higher-than-anticipated portfolio purchases, making the deleveraging path less clear. The COVID-19 pandemic will affect Intrum's business for at least the short- to mid-term. In our opinion, the economic downturn may lead to delays in collections from secured and unsecured debt overall in 2020, and possibly in 2021. We expect Intrum's performance to be somewhat less affected than some of its peers' due...

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