Research Update: AnaCap Financial Europe S.A. Downgraded To 'B' On Further Deterioration Of Its Financial Profile; Outlook Stable

We believe distressed debt purchaser AnaCap Financial Europe's (AFE's) financial performance and metrics will deteriorate materially over the remainder of 2020, more than expected previously, and to levels no longer commensurate with a 'B+' rating. We anticipate a roughly 45% decline in gross collections for 2020 against 2019 levels, with debt to EBITDA of roughly 9.6x-9.8x, and EBITDA interest coverage falling to around 2x. We are therefore lowering our issuer and issue level ratings on AFE to 'B' from 'B+', and removing our long-term ratings from CreditWatch negative. The outlook is now stable, as liquidity buffers remain solid and AFE continues to operate with an agile cost base. The downgrade of AFE's long-term issuer and issue level ratings to 'B',

...- We believe distressed debt purchaser AnaCap Financial Europe's (AFE's) financial performance and metrics will deteriorate materially over the remainder of 2020, more than expected previously, and to levels no longer commensurate with a 'B+' rating. - We anticipate a roughly 45% decline in gross collections for 2020 against 2019 levels, with debt to EBITDA of roughly 9.6x-9.8x, and EBITDA interest coverage falling to around 2x. - We are therefore lowering our issuer and issue level ratings on AFE to 'B' from 'B+', and removing our long-term ratings from CreditWatch negative. - The outlook is now stable, as liquidity buffers remain solid and AFE continues to operate with an agile cost base....

Research Update