Fitch Ratings has assigned Eleving Group’s (B-/Stable) EUR50 million senior secured bonds due in October 2028 (ISIN: DE000A3LL7M4) a final rating of ‘B-‘ with a Recovery Rating of ‘RR4’.

Read the full article on https://www.fitchratings.com/research/non-bank-financial-institutions/fitch-assigns-eleving-2028-senior-secured-bonds-final-b-rating-25-10-2023

The assignment of a final rating follows a review of the final terms and conditions conforming to information already received when Fitch assigned the expected rating (see “Fitch Rates Eleving’s Proposed Senior Secured Bonds ‘B-(EXP)’/’RR4′” dated 26 September 2023 at www.fitchratings.com/site/pr/10246581 for further details).

KEY RATING DRIVERS

The bonds’ rating is equalised with Eleving’s ‘B-‘ Long-Term Issuer Default Rating (IDR), due to Fitch’s expectation of average recoveries, as reflected in its ‘RR4′ Recovery Rating. This is because in Fitch’s view the bonds’ structural subordination to outstanding debt at operating entities offsets their secured nature. The bonds are guaranteed and secured by pledges on the equity and loan portfolios of its material subsidiaries outside sub-Saharan Africa and Uzbekistan (about 70% of Eleving’s total assets at end-1H23).

The bonds are rated at the same level as Eleving’s EUR150 million bonds due in October 2026 because they rank equally and have similar guarantors and security package.

The net proceeds are being used to repay the EUR30 million bonds issued by Eleving’s Latvian subsidiary due in March 2024 (ISIN: LV0000802452) as well as other funding, such as that raised on Mintos, a Latvian-licensed platform for retail investing in loans.

The key rating drivers and the rating sensitivities for Eleving’s Long-Term IDR are outlined in our rating action commentary published on 28 June 2023 (see “Fitch Affirms Eleving Group at ‘B-‘; Outlook Stable” at https://www.fitchratings.com/site/pr/10238916).