Jefferies Finance LLC

The stable outlook indicates that S&P Global Ratings expects JFIN will maintain leverage (including JFIN Parent) under 3.5x debt to adjusted total equity (ATE) over the next 12 months and successfully manage its underwriting and undrawn commitments. We also expect Mass Mutual and Jefferies to continue to support JFIN and the company to remain at least moderately strategically important to Jefferies. We could lower the ratings in the next 12 months if: Liquidity becomes strained, perhaps because of underwriting commitments or draws on revolvers by portfolio companies; Debt to ATE rises above 4.5x; or Jefferies reduces its commitment to JFIN. We could raise our ratings if JFIN significantly increases available liquidity relative to its underwriting and undrawn commitments, or if

...Our ratings on Jefferies Finance LLC (JFIN) reflect its concentration in leveraged lending, and the market and credit risks of its originate-to-syndicate and investing strategies. This is partially offset by the implicit support of Jefferies Group. We view the company's underwriting appetite as aggressive given its unsyndicated origination commitments have been, at times, in excess of its capacity to fund them. However, we also view the company's relatively good record and its franchise as one of the largest U.S. syndicated loan originators as positive rating factors. Our issuer credit rating on JFIN is one notch higher than the stand-alone assessment because we believe Jefferies would support JFIN under some circumstances of stress....

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