...Strengths: Weaknesses: + Funding, credit, and operational support from Jefferies Group and MassMutual + Moderate strategic importance to Jefferies Group + Concentration in leveraged lending + High credit risk of loans Outlook The stable outlook on Jefferies Finance LLC (JFIN) reflects S&P Global Ratings' expectation that the firm will maintain debt to adjusted total equity (ATE) below 4.5x with adequate liquidity and stable funding. We expect JFIN's profitability and risk exposure to continue to be driven by potentially volatile conditions in the leveraged loan market. But we expect JFIN to maintain adequate funding and liquidity in the event of market turbulence. We also expect MassMutual and Jefferies Group LLC to continue to support JFIN and the firm to remain at least moderately strategically important to Jefferies. We could lower the ratings over the next 12 months if: + Debt to ATE is consistently above 4.5x; + Unrestricted cash falls below $500 million, particularly if this is the...
