Fitch Ratings has upgraded
The Outlook is Stable. Fitch has also upgraded Anima's senior unsecured long-term rating to 'BBB' from 'BBB-'. A full list of rating actions is below.
Key Rating Drivers
Improving Leverage: The upgrade reflects Anima's sustained improvement in cash flow leverage, with its gross debt/EBITDA ratio, excluding performance fees, decreasing to 2.4x at end-2023 from 2.7x at end-2022. We also considered Anima's commitment to further reduce leverage by repaying its
Leading Italian Investment Manager: Anima is one of the largest Italian investment managers with
Standalone Profile: Anima's Long-Term IDR is driven by its Standalone Credit Profile and does not incorporate support from
Prudent Risk Profile: Anima has demonstrated its commitment to using its sizeable liquid assets (end-2023:
Stagnating Client Inflows: Net new money (NNM) flows in 2023 were negative
Lean Cost Structure, High Margins: Anima has low operating expenses with a Fitch-calculated cost/income ratio of 29% in 2023 thanks to its reliance on partner banks' distribution channels. Its adjusted EBITDA margin (excluding performance fees) was sound at 25%. Its average recurring fees/AuM margin is lower than domestic peers due to a large
Sound Liquidity: Anima's funding and liquidity profile is supported by a commission-based business model that does not require debt funding for cash generation. Its adjusted EBITDA (excluding performance fees)/interest expense debt coverage ratio was strong at 20x in 2023.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
A gross debt/EBITDA ratio sustainably above 2.5x or notably higher net cash-flow leverage (in particular if arising from outsized non-operational cash outflows such as dividend payments or share buy-backs).
Loss of distribution partners and inability to access alternative retail distribution channels (e.g. other banks, direct channels).
Material and sustained NNM outflows that could affect our assessment of Anima's franchise.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Upside is limited in the short term and would likely require an upgrade of
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
SENIOR UNSECURED DEBT RATING
Fitch equalises Anima's senior unsecure bond ratings with its Long-Term IDR as we consider these Anima's reference obligation, as well as due to our expectation of average recoveries.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The rating of Anima's senior unsecured notes is primarily sensitive to a change in Anima's Long-Term IDR, and is additionally sensitive to changes in Fitch's recovery expectation, for instance the introduction of a more senior debt layer.
ADJUSTMENTS
The sector risk operating environment score has been assigned below the implied score due to the following adjustment reason(s): sovereign rating (negative).
The funding, liquidity & coverage score has been assigned below the implied score due to the following adjustment reason(s): funding flexibility (negative).
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
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