Research Update: Debt Purchaser AnaCap Financial Europe S.A. Downgraded To 'B+'; Outlook Stable

On March 10, 2020, distressed debt purchaser AnaCap Financial Europe (AFE) reported its results for 2019, which included a €35.9 million non-cash impairment on its secured portfolios across Spain, Portugal, and Italy. Under our revised base case, which reflects this underperformance, we expect cash flow and coverage metrics to remain relatively high and volatile for the 'BB-' rating level. We are lowering our long-term issuer credit rating on AFE to 'B+' from 'BB-'. We are also lowering our issue rating on the group's senior secured notes to 'B+' and revising downward our recovery rating on the notes to '4' (rounded estimate: 40%) from '3' (rounded estimate: 50%). The stable outlook reflects our view that the group's cash flow profile and

...- On March 10, 2020, distressed debt purchaser AnaCap Financial Europe (AFE) reported its results for 2019, which included a 35.9 million non-cash impairment on its secured portfolios across Spain, Portugal, and Italy. - Under our revised base case, which reflects this underperformance, we expect cash flow and coverage metrics to remain relatively high and volatile for the '##-' rating level. - We are lowering our long-term issuer credit rating on AFE to 'B+' from '##-'. We are also lowering our issue rating on the group's senior secured notes to 'B+' and revising downward our recovery rating on the notes to '4' (rounded estimate: 40%) from '3' (rounded estimate: 50%). - The stable outlook reflects our view that the group's cash flow profile and defendable niche in the European distressed debt market will support the 'B+' rating over the next 12 months....

Research Update