Standard & Poor's Ratings Services (S&P) allotted "B+"
issuer credit rating (ICR) to
) with a stable outlook.
Concurrently, the credit rating agency also allotted "B+" rating
to the company's expected $200 million notes issue.
DCF Global has also priced its proposed $200 million notes
offering. The notes will carry a coupon of 3.25% with maturity
scheduled for 2017.
The rating on DFC Global incorporates the company's solid market
position along with its widespread exposure and different product
offerings. The rating also takes into account DFC Global's
increased leverage, negative tangible equity and modest interest
The rating agency stated that DFC Global will be considered for
rating upgrades if the company maintains or lowers the leverage at
below 3.5x and maintains or increases EBITDA interest coverage at
above 4.0x. Also, the rating agency expects the company to maintain
However, the rating will be subject to downgrade if
profitability lowers and leverage trends or surpasses 5.0x.
DFC Global reported a strong fiscal second quarter with earnings
of 51 cents, ahead of the Zacks consensus Estimate as well as year
ago earnings led by a solid performance at its core business
The company experienced higher consumer lending revenue
(shooting 61% year over year) and pawn service fees and sales
increased nearly three fold. The company also has a solid liquidity
position, besides remaining focused on enhancing its shareholders
Going forward, the company is also expected to grab
opportunities through acquisitions and deploy the available funds
to further enhance future earnings.
We retain our Neutral recommendation on DFC Global over the long
term. The quantitative Zacks #3 Rank (short-term Hold rating) for
the company indicates no clear directional pressure on the stock
over the near term.
Headquartered in Berwyn, Pennsylvania, DFC Global provides a
range of consumer financial products and services to under-banked
DFC GLOBAL CORP (
): Free Stock Analysis Report
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